Bank banks $70m mine northwest of Cairns
A $70 million tungsten mine 160km northwest of Cairns has received the backing of the Macquarie Bank.
The bank has agreed to a two-year $3 million convertible loan facility to Vital Metals Ltd.
A company statement to the ASX said the funds would be used for the Watershed Definitive Feasibility Study as well as the Burkina Faso gold project and general working capital purposes.
"The board is pleased to obtain the support of Macquarie and views this arrangement as a positive endorsement of the company and its projects," the developer and explorer's statement said.
"The funding facility with Macquarie will enable Vital to complete all work necessary to deliver the DFS and progress permitting for the Watershed project."
The statement said Japan Oil, Gas and Metals National Corporation's commitment to fully fund the DFS was based on specific budget amounts being available to the company within a specified time frame.
"This would have restricted expenditure this year and could have delayed the targeted completion of the DFS in 2012," it said.
"Vital has now secured strategic relationships with two internationally recognised partners in Macquarie and JOGMEC.
"The Watershed project is poised to meet a genuine demand and interest for a long-term tungsten supply for the Japanese and other Asian markets."
Vital is aiming to start construction of the Watershed site near the headwaters of the Palmer and Mitchell rivers in the first quarter of next year with the first concentrate being produced by 2014.
Up to 100 people would be employed during construction and 50 during mine operations. Gregg Construction at Mareeba will undertake the work.
Vital is forecasting $30 million in concentrate a year being trucked to Brisbane and then shipped out to Japan, followed by the US and Korea.
Watershed is "a globally significant resource" sitting in the top 10 tungsten mines outside of China.
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