Australian tin exploration and development company Consolidated Tin Mines (CSD) has announced an agreement with its major shareholder, Hong Kong-based Snow Peak International, to fund the final stages of a pre-feasibility study of its Mt Garnet project in Queensland. The agreement also sets out the basis for the formation of a joint venture company to fund a substantial portion of the proposed process plant development costs. CSD is targeting a Q1 2014 start-up of a one million tpy ore processing plant producing some 5,000 tpy of tin-in-concentrate.
Under the Heads of Agreement, and subject to shareholder agreement, Snow Peak will advance A$3 million towards the PFS in return for share options. On completion of the PFS, Snow Peak may elect to proceed with a joint venture company to develop the project by contributing up to a maximum of 100% of the project NPV calculated using the results of the PFS in cash (less the advance already paid) to earn a 50% interest in the share capital of the joint venture company.
CSD Chairman and Managing Director Ralph De Lacey noted that “the most important aspect of this agreement is that it sets out a clear pathway for funding the development of the project, with Snow Peak providing a substantial portion of the process plant capital expenditure requirements. The Company has not sought to include an off-take agreement at this stage, thereby leaving the option open to negotiate with established participants in the tin industry to secure any additional funding for capital expenditure requirements on reasonable terms. Various aspects of the PFS have been underway for some time, and the company is aggressively scheduling PFS completion in the third quarter of this year.”
