Keysbrook Mineral Sands Project Announces GR Engineering Services as Preferred Contractor

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Researched by Industrial Info Resources (Perth, Australia)--MZI Resources Limited (ASX:MZI) (East Perth, Western Australia) has announced GR Engineering Services Limited (ASX:GNG) (Belmont, Western Australia) as its preferred contractor for the Keysbrook Mineral Sands Project. The contract is worth approximately $49 million (AUD$54.6 million). The Keysbrook project is located approximately six miles (11 kilometres) south of Serpentine, Western Australia.

Upon MZI Resources Limited securing finance for the project, GR Engineering Services will become the engineering-procurement-construction (EPC) contractor. This contract was competitively fought out with a number of companies applying for the position.

The Keysbrook project involves the construction of an open pit mine and an approximately 4 million-ton-per-year wet processing plant to produce 110,000 tons per year of heavy mineral concentrate. The product will be transported 74 miles (120 kilometers) by truck to Doral Mineral Sands Pty Limited's (Picton, Western Australia) Dry Mineral Separation Plant, where it will be further processed to produce 36,200 tons per year of Leucoxene (L88), 28,700 tons per year of Zircon Concentrate, and 26,000 tons per year of Leucoxene (L70). After processing, it will be transported to the Bunbury Ports for shipment.

Doral Mineral Sands Pty Limited's Picton Dry Mineral Separation Plant will require modifications and upgrades, which will be undertaken by MZI Resources Limited. The total scope of work for the project is expected to cost MZI Resources Limited approximately $58 million (AUD$64.3 million). The expected mine life of the project is 5.5 years, but it has the potential to be extended to more than 15 years.

Acquiring finance always has been an issue of concern for the Keysbrook project; a major lender pulled out of contract negotiations in October 2013, leading to further delays. However, MZI Resources Limited is now in financial negotiations with a number of lenders and expects to achieve full financial approval by March 2014.

Upon financial approval, GR Engineering Services Limited will commence engineering work, with early site works expected to kick off in mid-2014 and project completion in mid-2015.

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