Metallica Minerals Ltd. said Aug. 6 that it withdrew its mining lease application for a proposed haul road to Hey Point, which was to be used to deliver product from the Urquhart bauxite project in Queensland, Australia.
Shares were down 11.76% by trading close following the announcement.
The ASX-listed explorer said the grant of the lease for the haul road would have triggered various actions and commitments that are not in its interest unless there is a secure and commercial pathway to gaining use of the Hey Point infrastructure.
The Hey Point infrastructure is insufficiently developed to meet a larger transshipping operation.
Further, Metallica reached a point of having to invest a significant level of shareholder funds and commitments to secure the lease for the haul road route over tenements held by third parties.
A review into startup delays at Urquhart found that Metallica unit Oresome Australia Pty. Ltd. failed to negotiate a logistics contract with owners of the Hey Point transshipment infrastructure and failed to pursue other loadout options.
Metallica, together with its joint venture partner, is progressing studies and designs for building a barge-loading and/or ship-loading facility in an area adjacent to tenements owned and controlled by the consortium.
The results of the study will not be immediately available. The production start date at Urquhart is not expected until after 2020.