Atlas Consolidated Mining & Development Corp. (ACMDC) is making an advance payment of P42 milion to TVI Resources Development (Phils.) Inc. to fund the operation of the Canatuan Copper Zinc Sulphide project.
Under the agreement inked by the parties, TVI International Marketing Ltd. has pledged in favor of ACMDC its shares in TVIRD as security for the advance.
According to ACMDC, the Canatuan Project is at an advanced stage of development with much of the required plant, equipment and infrastructure already in place.
Potential resources exist to the north of the Canatuan MPSA to extend the estimated mine life beyond six years.
ACMDC said detailed mine feasibility studies have been completed and, subject to finance availability and due diligence, the company estimates that first production of copper concentrates can begin as early as second half of 2008.
Meanwhile, ACMDC reported that its 42,000 tpd Toledo Copper project is on schedule to be in production mid-2008.
ACMDC earlier announced plans to acquire an integrated steel plant in Guangxi province in China through Berong Nickel Corp.
Berong, which operates nickel mine sites in Palawan, is a joint venture among ACMDC, London-based Toledo Mining Corp. and Investika Ltd. of Australia.
ACMDC said Berong will conduct a due diligence over the next six months prior to acquiring the assets, consisting mainly of a three-year old steel plant producing hot rolled steel bars and billets for the domestic Chinese market.
Berong plans to convert part or all of the steel plant for the production of nickel pig iron and stainless steel.
The plant is estimated to require 1.2 million tons of nickel laterite ore feedstock per year.
ACMDC said the joint venture partners intend to enter into a long-term contract to supply all the plant’s feedstock requirements on prevailing commercial terms.
Berong earlier signed a five-year contract to supply up to a minimum of 500,000 wet metric tons of nickel ore per year to Queensland Nickel Pty. Ltd., a unit of BHP Billiton, one of the world’s largest mining company.