Western Australia’s next new mineral sands mine is a major step closer, with Diatreme Resources Limited announcing today the signing of the necessary agreements for leading mining services company China ENFI Engineering Limited (ENFI) to complete a definitive feasibility study (DFS) for Diatreme’s Cyclone Zircon Project. 

Replacing the previous non-binding Memorandum of Understanding announced on September 11, 2017, Diatreme and ENFI have signed two contracts comprising of a Cooperation Agreement and a Consulting Services Agreement. 

The Cooperation Agreement means ENFI will use its network within China’s state-owned enterprise (SOE) and banking sectors to assist in sourcing project investors, off takers and project debt funding, while the Consulting Services Agreement, details the remaining DFS aspects to be completed by ENFI, including project costings and economics, engineering studies and implementation planning. 

The timeframe for DFS completion is estimated at five months. ?

Diatreme Chairman William Wang said the signing of the agreement was a historic moment, not only for Diatreme but also for Australia’s mineral sands industry. 

“We are delighted to be working with a company of the size and expertise of ENFI as we advance our flagship project towards mining, for the benefit of all stakeholders,” Mr Wang said.

ENFI is backed by one of China’s largest state-owned enterprises (SOEs) involved in the mining services sector, being a wholly owned subsidiary of Metallurgical Corporation of China, part of the China Minmetals Group. 

Headquartered in Beijing, China Minmetals has $314 billion in total assets and is ranked 120th in the Fortune Global 500. 

The support of ENFI’s commercial and Chinese SOE networks is expected to be crucial in securing the necessary project partners for Cyclone, including investors, off takers and providers of project debt funding. 

ENFI has also been provided with the necessary Cyclone project information to undertake the outstanding items of the DFS, which when completed will provide lenders with the level of confidence required to finance the mine’s development. 

The agreements with ENFI follow Diatreme’s successful de-risking of its flagship project, with the issuing of final environmental approvals from the WA Government in January 2017, along with the determination of a suitable water supply, agreement with the Native Title holders and award of a Mining Lease. 

Diatreme Chief Executive Officer Neil McIntyre said the agreements represented the final push needed for the Cyclone project, with the potential for first production by the end of the decade in an environment of rising prices and constrained supply. 

“We now have the right technical partner in place to deliver the right project at the right time, securing increased value for our loyal shareholders,” Mr McIntyre said.

Picture Diatreme Eucla Basin mineral sands drilling.