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MMG inks zinc off-take deal for Dugald River project in Australia

MMG Ltd. said Oct. 18 that it entered into a zinc concentrate off-take deal with Minmetals North-Europe AB from the Dugald River zinc project in Queensland, Australia.

Minmetals North-Europe is a wholly owned subsidiary of China Minmetals Corp., the ultimate controlling shareholder of MMG.

The agreement, valued at about US$12 million, involves the sale of about 10,000 dry tonnes of zinc product.

The pricing will be determined based on zinc contained in the concentrate at the special high-grade settlement price for zinc as quoted on the London Metal Exchange as well as the silver contained in the product at London Bullion Market Association silver price spot quotation.

The pricing will be less an agreed treatment charge, which is consistent with those charges prevailing for comparable zinc concentrate sold by major global zinc concentrate producers in China at the time of the delivery.

The Dugald River operation will produce about 340,000 dry tonnes of zinc concentrate at full production, and production is expected to begin before the end of the year.

MMG recently reported that the Dugald River zinc mine is 89% complete.