Metals X Limited Begins Definitive Feasibility Study for Wingellina Project

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Researched by Industrial Info Resources Australia (Perth, Australia)--Metals X Limited (ASX:MLX) started the definitive feasibility study (DFS) for its Wingellina nickel/cobalt mine and processing plant project in the Northern Territory. The project is named after a small, indigenous Australian community and is located near the junction of Western Australia, Northern Territory and South Australia.

In 2008, a feasibility study was undertaken and completed by Metals X that proved it to be a commercially viable project with a mine life of 40 years. It is estimated to have an annual production capacity of 40,000 tonnes of nickel and 3,000 tonnes of cobalt. In July 2010, an agreement was made between the company and the traditional landowners that allowed for continued development. The DFS is expected to take at least 16 months, and it is scheduled to be completed in June 2014.

In September 2012, the company entered into a memorandum of understanding (MOU) with Samsung C&T (Seoul, South Korea) for the development of Wingellina. Under the terms of the MOU, Samsung C&T will assist Metals X, providing technical expertise in engineering, feasibility study and construction. Samsung C&T also will play a vital role in arranging funds for the project using its financial reputation and capacity. Upon the completion of DFS, Samsung C&T will be awarded the engineering, procurement and construction (EPC) contract for the Wingellina project.

The project is a significant addition to Samsung C&T's Australian mining industry portfolio, following Samsung C&T's entry into Australian market in 2010. Samsung C&T also is involved in the $10 billion Roy Hill iron mining project in Western Australia. The design engineering for the processing and plant infrastructure contract was awarded recently to engineering and construction firm SNC-Lavalin Australia Pty Limited.

The feasibility study that was previously completed presented favourable metallurgical characteristics for high-pressure acid leach processing. Metals X has charted out a total capital expenditure of approximately $2.3 billion and expects to commence production by late 2015.

"Further to the recently signed MOU with Samsung, ongoing discussions with additional potential strategic, financial and banking partners continues to highlight the strong interest in the project," said Peter Cook, the chief executive officer of Metals X.

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