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Last month Mineral Resources announced it had reached agreement with the receiver and managers, KordaMentha’s Martin Madden and Brian McMaster, to lead a consortium to recapitalise Windimurra.
Under the terms of the HoA, Atlantic will become a 25% equity holder in Midwest Vanadium, the 90%-owned subsidiary of failed company Windimurra Vanadium.
Atlantic will also arrange the new secured debt funding required to complete commissioning of the project.
The amount of funding required is still to be determined but will be sufficient to complete construction and ramp-up to full production of 5700 tonnes per annum of ferro-vanadium.
Mineral Resources and the original secured lenders to Midwest Vanadium will retain a majority stake.
Mineral Resources will complete plant construction and will continue to operate the crushing and processing plants through the contract it had in place with Midwest Vanadium prior to it entering administration.
The HoA is subject to procurement of the new secured debt funding package on terms acceptable to both Mineral Resources and Atlantic.
Windimurra Vanadium went into administration in February after it was unable to raise the funds needed to stay afloat.
The company had been in talks with debt and equity providers over securing up to $A30 million via a debt facility to bring the project into production.
However, no deal took place after the bottom fell out of the vanadium market, like other commodities, in the second half of 2008.
First production from the Windimurra mine is targeted for the third quarter 2010.
The deal caps off a busy week for Atlantic after it signed a memorandum of understanding with Vietnamese state-owned enterprise Vietnam Natural Resources and Environment Corporation to develop a 25 million tonne per annum bauxite mine in Vietnam.
Atlantic is headed by former Fortescue Metals Group chief financial officer Michael Minosora, who left FMG to join the junior in September.
Shares in Atlantic remain unchanged at 3.6c, while shares in Mineral Resources dropped 2c to $7.03.
