MMG has announced a financing deal to develop its Dugald River zinc, lead and silver mine in North-West Queensland.
The company has entered into an amended facility agreement of up to $US550 million with China Development Bank Corporation (CDB) and Bank of China Limited, Sydney Branch (BOC Sydney).
MMG said the expected remaining cost of taking the project to first shipment of concentrate had been reduced to $US600-620 million plus interest as a result of an improved development plan and savings secured through strategic sourcing in the mining construction downturn.
MMG chief executive officer Andrew Michelmore said the company remained positive about the long-term fundamentals for zinc.
“With the closure of recent major zinc mines globally, including the end of processing at our own Century mine in Queensland earlier this year, Dugald River will come online at a time of ever-shrinking global supply,” he said.
MMG says early works have progressed successfully on site, with pre-production mine development from two declines carried out throughout 2015 and 2016.
Long lead time items have been ordered and key contracts for construction activities finalised.
Following confirmation of financing arrangements, construction of the processing plant would commence immediately, MMG said, with first concentrate production expected in the first half of 2018.
The Queensland Government recently granted Dugald River prescribed project status, which is expected to significantly streamline administrative decisions and accelerate the development of the mine.
“We greatly appreciate the strong support from the Queensland Government,” Mr Michelmore said.
“The development of Dugald River and its long-term operation is expected to provide significant employment and economic benefits to Cloncurry and Queensland for around 30 years.”
MMG continues to progress the negotiation of remaining service and construction contracts and necessary permits and approvals for the project.
The optimised mine plan at Dugald River will support a 1.7 Mtpa nameplate plant with annual production of about 170,000 tonnes of zinc in zinc concentrate, plus by-products.