LionOre Nickel has also agreed to project finance terms with NM Rothschild & Sons (Australia) for mine development.
Emily Ann is planned to be operating at full production capacity within 18 months of a formal development decision being announced following finalisation of the detailed documentation.
LionOre chairman and CEO Don Bailey said the decision to commence site works ahead of a formal development decision is indicative of the company's confidence in the project.
The Rothschild financing facilities include a $17 millin project debt facility, a $3 million cost over-run facility, a $2 million guarantee facility and various hedging facilities.
LionOre must implement a commodity hedge program before it can draw on the facilities.
Unsecured debt facilities have been arranged with parent company LionOre Mining International to enable LionOre Nickel to implement the hedge program and commence construction and mine development at Emily Ann. The short term funding will be repaid from the Rothschild project debt facilities.
The new facilities augment a $25 million limited recourse finance facility previously arranged with Canadian company Inco Ltd for the construction of a concentrate plant and associated infrastructure at Emily Ann, and a long-term nickel off-take arrangement.
Emily Ann, 150km west of Norseman, is planned to be an underground operation utilising an onsite conventional nickel sulphide concentrate plant with an annual throughput of 250,000 tonnes producing an average of 6700t of payable nickel annually over the initial five year life of the mine.
Estimated pre-production expenditure of $42 million is anticipated.
At a nickel price of US$3 per pound and an exchange rate of US65c/A$1, forecast average total cash operating costs for the initial life of Emily Ann are about US$1.55/lb, including smelting, transport and refining costs and by-product credits.
