Speciality Metals International Ltd. is in advanced negotiations with Cronimet Holding GmbH for a conditional participation for the staged development of the former's Mount Carbine tungsten project in Queensland, Australia.
As part of the deal, Cronimet will advance US$3.5 million of cash by way of an off-take agreement defining the delivery of tungsten concentrate from the Mount Carbine project.
Cronimet will secure the right to all off-take from the project, including the open pit, according to the Dec. 24 release.
Production will start from about 12 million tonnes of stockpiled material following recommissioning of the tailings retreatment plant. Cronimet will assist with the refurbishment of the existing plant and sourcing the plant required to start production from the stockpiled material.
A newly formed joint venture company, held 50/50 by Speciality Metals and Cronimet, will undertake the tailings and stockpile projects. Speciality Metals will also receive a 2.5% royalty on the joint venture's gross revenue.
The deal is expected to close in February 2019.
Additionally, Speciality Metals noted that it has agreed to the previously announced purchase of Mount Carbine quarry and mining leases, 4867 and 4919, for a total of A$8.0 million.
The agreement is conditional on the company obtaining finance to complete the transaction, it noted.