Royal terminates Sin-Tang MoU

EMERGING iron ore producer Royal Resources has terminated a deal with Singapore-based Sin-Tang Development over its Razorback iron ore project in South Australia, describing it as unworkable and not in the best interest of shareholders.
Royal terminates Sin-Tang MoU Royal terminates Sin-Tang MoU Royal terminates Sin-Tang MoU Royal terminates Sin-Tang MoU Royal terminates Sin-Tang MoU

Razorback Ridge in South Australia

MiningNews.Net

However, the company remains confident it can attract another partner if needed and is assessing whether one is in fact needed in the short term.

Talks will begins shortly with interested parties to gauge the value that they might bring to Royal.

The companies signed a memorandum of understanding in October last year whereby Sin-Tang had the potential to earn a 50% interest in the Red Dragon project within the greater Razorback project through funding prefeasibility and bankable studies, and payments of $A50 million.

While negotiations to thrash out a definitive JV agreement have been ongoing since then, the two parties could not agree on a number of peripheral issues.

However, Sin-Tang spokesman Xie Yuzheng confirmed the group still viewed Razorback as a long-term investment and intended to remain Royal’s largest shareholder.

In a statement, Royal managing director Marcus Flis said the company’s ability to quickly progress the project to a maiden inferred resource of 277 million tonnes grading 25.9% iron, 41.4% silicon dioxide, 6.7% aluminium oxide, 0.2% phosphorous, 353% calcium oxide and 0.45% titanium dioxide, had drastically reduced any project risk.

The resource is based on drilling covering only 3 kilometres of a possible 18km strike length, but Royal plans to undertake further drilling next month in a bid to lift the resource to a minimum target of 500-1000Mt at grades of 25% to 65% iron.

The program will fill in areas where insufficient drilling has been undertaken, as well as start drilling at the Iron Peak prospects to calculate an inferred resource and extend drilling 1.5km to the east of the Razorback Ridge area.

This phase of work, expected to take four months to complete, will total about 14,000 metres of reverse circulation drilling and 2000m of diamond drilling, and is expected to lift the combined resource defined on these three adjoining prospects to an estimated 500-600Mt at similar grades.

Preliminary metallurgical testing has confirmed the Razorback Ridge magnetite ore is soft and will be low-cost to crush and grind for beneficiation.

Shares in Royal were unchanged in early morning trade at 19c.