Mining company First Bauxite Corporation has signed a Letter of Intent with an unidentified company which could see the miner supplying bauxite to that company when it starts producing around 2014.
In a statement last week, First Bauxite announced that it has “signed a Letter of Intent (LOI) to enter into its first Sintered Bauxite Supply Off-Take Agreement with a global refractory products manufacturer.” The LOI commits both companies to conclude a multi-year Off-Take Agreement within six months from the date of signing based on terms which have been set out in the LOI. The LOI reflects the recognition by the customer that First Bauxite is in the process of securing “Bankable” Off-Take Agreements to underpin the debt component of its project financing plan, the statement said.
“The execution of this first LOI represents an important step towards securing project financing to bring the Bonasika refractory bauxite mine into production. Along with the recently announced Bankable Feasibility Study Update, receipt of the Environmental Permit, and the signing of the Mineral Agreement in Guyana, the conversion of market interest in Guysin(R) into a Sintered Bauxite Supply Off-Take Agreements is a significant milestone in enabling First Bauxite to develop this world-class project,” Ioannis (Yannis) Tsitos, Interim Chairman of First Bauxite was quoted as saying.
“The customer is a leading producer of shaped and monolithic refractories and a significant purchaser of refractory bauxite,” Hilbert N. Shields, President and CEO of First Bauxite was quoted as saying. “The Customer’s strategic interest in becoming First Bauxite’s inaugural consumer is gratifying in that it further validates the high quality of First Bauxite’s expected Guysin(R) product from a prominent end-user of refractory bauxite,” he said.
The statement added that First Bauxite has received feedback from a number of potential customers on all continents who are end users of the company’s Guysin(R) product and to whom “lab-scale” manufactured Guysin(R) samples were distributed for qualifying in their own test facilities. The responses have been very positive and have generated requests for larger samples that can be integrated and “works tested” in their benchmarked product lines, the statement said. Last month, the Canada-based company signed its mineral agreement with the government of Guyana.
CEO of the Canadian Company Shields stated then that construction will take approximately 18 months and that he is hopeful that it will be commissioned by the end of 2013 and start producing in 2014.
First Bauxite, Shields said, is going to be focused on bauxite development in an area that had initial historical resources of 1.6 million tonnes. “We’ve evolved into a world class exploration team, we’re comfortable with the challenges of exploring for bauxite in Guyana, we’ve grown by historical resources from 1.6 million tonnes to over 12 million tonnes, which will now support the project with more than four years supply in our reserve space based on a production level of 100,000 tonnes per year,” he explained.
