Metallica finds port solution for Urquhart bauxite project

ASX-listed Metallica Minerals has struck a heads of agreement (HoA) with the operator of the nearby Hey Point bauxite mine to provide logistical services for the Urquhart bauxite project, in Cape York.

The agreement would see direct shipping bauxite from the Urquhart mine delivered to export vessels through the approved Hey Point load-out facility, some 15 km away. The HoA included capped contracting rates over the projected life of the project, as well as access to the Hey Point load-out facility for transshipping bauxite.

The agreement would form the basis of a full binding service contract and a binding access agreement, which was targeted for August this year. “As a bulk commodity operation, the economics of the Urquhart bauxite project are closely tied to the logistics of delivering product to port and onwards to customers,” said Metallica CEO Simon Slesarewich.

“This agreement locks in our preferred logistics solution, which significantly de-risks the project and assures a quick ramp-up to sustainable production in the first half of 2017, for a very low capital investment.”

The Urquhart project was expected to produce between 1.5-million and 2-million tonnes a year of direct shipping bauxite. The bauxite project forms part of the greater Cape York heavy mineral sands and bauxite joint venture between Metallica subsidiary Oresome Australia and China’s Ozore Resources.