IMX Resources eyes Cairn Hill expansion after signing new Chinese customer

IMX Resources (ASX: IXR) now has a second customer for the company's Cairn Hill magnetite – copper ore, with a contract to sell two trial shipments to a new Chinese buyer.

The first of the shipments sailed from Port Adelaide on 1 July, with the second shipment due to be loaded in the second half of July. A third is in the final stages of negotiations.

The two trial cargos potentially are a prelude for IMX Resources to a long term sales contract with a processing plant / steel mill, which importantly already processes ore similar to the Cairn Hill ore.

The plant has recently completed an expansion and is looking for long term sources of feed.

Duncan McBain, managing director, told Proactive Investors today that IMX Resources are talking to other customers for both long term contracts and spot shipments.

The first phase of the Cairn Hill project is now close to producing at full capacity and is shipping two large panamax vessels per month to customers in China.

McBain added, "From September we will have modest additional rail capacity and additional customers will provide the ability to maximise the use of the rail capacity with additional shipments.

"While we have not sought sales contracts yet, we are talking to a range of customers for our Phase two project where we intend to ship a 58-60% iron product – we are looking to be in a position to commence shipping that product in the March quarter 2012, initially at an annualized rate of 0.4mtpa ramping up to 0.8mtpa from around mid-year."

The Sichuan Taifeng processing plant has commenced commissioning and has produced its first concentrate. Despite the plant still being in the commissioning phase, the grade of the magnetite concentrate produced has been exceptional at between 70.3% - 70.6% iron.

This places the Bayuquan processing plant in a very strong position as one of very few plants in China that are able to produce a 70% plus iron concentrate.

Cairn Hill Phase two

Phase two has the potential for a low capital and operating cost project, which IMX Resources is looking to fast track development leveraging off existing approvals and infrastructure.

Production is targeted at 0.8mtpa to 1.2mtpa from the first half of 2012.

The planned development is for a dry magnetic separation to ±60% iron concentrate, with a very low capital and short approvals process.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/17708/imx-resources-eyes-cairn-hill-expansion-after-signing-new-chinese-customer-17708.html