Emerging African iron ore producer Genmin (ASX:GEN) has received a letter of intent from Sino-Hunan International Engineering and Development Co (SHICO).
SHICO outlines its intention to become a cornerstone project participant and offtake partner in the development of the company’s flagship Baniaka Iron Ore Project located in Gabon, Central Africa.
Under the terms of the LoI, SHICO proposes working with Genmin to:provide or procure 60% of the project funding requirements, with Genmin responsible for sourcing the remaining 40% to complete the proposed stage one development to produce 5Mtpa.
The total capital estimate from Genmin’s Prefeasibility Study (PFS) published in November 2022 is some US$200 million.
The parties have agreed to explore the funding structure options including an equity investment.
The LoI also proposes to integrate Chinese Hunan Province engineering, fabrication, and equipment supply chain capabilities to support the project’s cost-effective delivery.
A 10-year strategic collaboration plan to deliver a comprehensive solution to support the development (and subsequent expansion) of Baniaka, also forms part of the LoI.
This follows productive discussions and recent meetings between Genmin’s CEO Andrew Taplin and SHICO representatives.
SHICO has expressed its intent to work closely with Central South University (CSU), which has been actively involved in evaluating the Baniaka ore body through Genmin’s Gabonese subsidiary Reminac.
SHICO is the main enterprise responsible for international project contracting and international trade under Hunan Construction Investment Group (HCIG). SHICO is a Hunan Province based provincial state-owned enterprise.
Write to info@mining.com.au at Mining.com.au
Images: Genmin
