WMN finalizes agreements with Korean firms to develop Tamboli project
Monday, March 2 2015 - 04:09 AM WIB
ASX-listed Western Mining Network, Ltd. (WMN) said last week that it has signed definitive agreements with South Korean firms for the engineering, procurement, and construction of a processing and purification plant capable of producing commercial grade graphite powder at its Tamboli project in Kolaka, Southeast Sulawesi.
Concurrently, WMN has also signed a definitive agreement with Nexinova Corporation to market this commercial grade graphite powder.
The contract for the plant calls for its completion within 14 months from the starting date of construction, the company said in a statement.
WMN signed late last year a Heads of Agreement (HOA) with a consortium of three South Korean companies to fast track development of the Tamboli project. The consortium consisted of Udin Engineering Co. Ltd (Udin), E-Petro Chemical Co. Ltd (E-Petro), and Nexinova Corporation Ltd. (Nexinova).
Under the HOA, WMN will be responsible for mining and stockpiling graphite ore, Udin will be responsible for engineering, procurement and construction of a beneficiation plant at the Tamboli Project and E-Petro will be responsible for ensuring that the output from the beneficiation plant will be a suitable graphite carbon powder that can be marketed by Nexinova to its proprietary steel industry customers throughout Asia.
Asked to comment on finalizing the plant agreement, CEO and President of E-Petro Chemical Company LTD and Authorized Director of Udin Engineering Group (E-Petro/Udin), the Korean Engineering firm and project management firm and counterparty to the agreement, Chae Soo Lee stated: ?Having analyzed the quality and typical characteristics of the Tamboli graphitic phyllite samples, we are confident that the proposed plant can perform as expected and deliver the quantity and quality agreed to.?
Lee added: ?Due to the quality and accessibility of the graphite deposit, we are confident that our plant can produce commercial grade graphite powder adjacent to the mine site. Our consortium partner, Nexinova has existing clients that are major purchasers of this type of product currently. We believe that off-take of all product can be achieved through Nexinova?s Client base.?
In this regard, WMN has executed a 5-year agreement from completion of the plant with Nexinova, another well-established Korean manufacturing and sales company supplying the steel industry in Korea, Japan, Indonesia, Taiwan and China. As the company?s graphite powder is a necessary additive in the recarburisation process used in steel manufacturing, refractories, carbon bricks for blast furnaces and battery anode manufacturing processes.
In commenting on these two agreements, Executive Chairman of WMN, Christopher Clower stated: ?This is a major step forward for the Tamboli Graphite Project. With the execution of these agreements, we are now highly confident in our ability to raise the finances required to build the beneficiation plant and get the operation producing and selling commercial grade graphite powder.?
The Plant agreement is contingent upon WMN successfully closing financing for the project. WMN is currently negotiating funding for this project. Presently, the company is pursuing financing of the type that minimizes dilution to current shareholders.
The company is also continuing its exploration program at Tamboli. A total of 15 successfully recovered drill holes were drilled over approximately 10 ha of the 98 ha concession. Based upon evidence from our exploration, the company has begun work to continue to explore the remaining area at Tamboli. This work will go on simultaneously to the development of the Tamboli?s Beneficiation plant and first phase of production so that the company can continue to provide upside to shareholders through potential continued exploration success while construction and development are ongoing.
Editing by Reiner Simanjuntak