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AXE swings a deal for Leigh Creek
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Archer Exploration (ASX:AXE) says it could have a binding magnesite supply agreement in the bag as soon as the second quarter.
It told its investors yesterday that it had tied down a non-binding memorandum of understanding with a ‘local company’ covering the mining and supply of magnesite from Leigh Creek on a long-term basis.
The MOU also includes a coordination of activities in the Leigh Creek area with an eye towards completing a definitive deal on magnesite supply in late Q2.
The supply agreement is a positive step for Archer, as it provides somewhat of a timeline on project development it can take to regulators, investors, and potential offtake partners.
“This is an exciting, and important, milestone in the development of the Leigh Creek Magnesite Project,” AXE chairman Greg English said.
“This MOU will help accelerate the project development timetable and provide added confidence to potential partners and investors in Archer.”
While AXE’s main game is graphite in the Eyre Peninsula of South Australia, it has been increasingly vocal on its Magnesite play to the north.
Project development had stalled, but the decision of Alinta to pull out of the area in 2015 left associated infrastructure in the area free for potential developers of projects, such as AXE.
In a further statement of intent on Leigh Creek, AXE recently updated the JORC resource at the project to the latest standard.
The total Leigh Creek Magnesite Project has a Mineral Resource of 434Mt @ 41.4% MgO.