The Asia Miner

OCT-DEC 2015

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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62 | ASIA Miner | October-December 2015 Chinese Investment Abroad Pilbara signs Pilangoora offtake agreement Pilbara Minerals has taken an important step towards establishing long-term offtake arrangements for its Pilgangoora Lithium-Tantalum Project in Western Australia. It has signed an Exclusive Distribution Agreement (EDA) and non-binding Memorandum of Understanding (MoU) for the future sale of low-iron high-grade spodumene con- centrate into China. The agreements are for concentrate from the Pilgangoora project and were signed with SFM, a signifcant Chinese industrial group that has the know-how and capabilities to upgrade lithium concen- trates to specifcation for the glass and ceramic industries in China. SFM is highly regarded and well known in the Chinese glass/ce- ramics market. Pilbara supplied a one tonne bulk sample of spodumene to SFM earlier this year. SFM has completed its analysis and testing of the sample and confrmed that the spodumene can be readily upgrad- ed to very high grade specifcations. Pilbara intends to complete the upgrading/concentrating process on site and will then supply the upgraded product to end-users through SFM. Tairui funds support Western Potash Beijing Tairui Innovation Capital Management Ltd has agreed to make a strategic equity investment of Can$80 million in Western Potash Corp, a company engaged in the evaluation, exploration and development of potash properties in western Canada. The in- vestment will result in Tairui holding up to a 51% ownership stake in Western on a non-diluted basis. Under the terms of the investment agreement, Tairui will have the right to appoint four nominees to the board of directors of Western. Proceeds will be used for the development of the pilot plant scale selective solution mining operation in accordance with the positive scoping study on Western's 100%-owned Milestone property in southern Saskatchewan. Tairui is a China-based private equity investment company with a focus on the energy and mining industries. The management team has extensive experience in project management and investment management in the natural resource sector. Focus gains Shandong Gold investment Shandong Gold International Mining Corporation has agreed to subscribe for more than 4.5 billion ordinary shares in ASX-listed Fo- cus Minerals shares to raise Aus$227.5 million. If approved, Shan- dong will hold 51% of Focus and will appoint three representative directors to the existing four-director Board. Focus, which has one of the largest bank balances of any gold miner on the ASX, has four producing gold mines at Coolgardie and Laverton in the eastern goldfelds region of Western Australia and has 1650sqkm of tenement holdings and an existing mineral resource of 4.3 million ounces of gold. Shandong Gold International Mining Corporation is a 65%-owned subsidiary of Shandong Gold Group Co. With the signifcant drop in the gold price, Focus took the strategic decision to suspend mining at its operations to preserve cash and use this period to reset the business taking into account experience gained from the commencement of production. Woxna graphite offtake deal TSX-listed Flinders Resources continues to position itself to supply high-purity graphite to the lithium ion battery market and has struck a new deal with a strategic Chinese partner for supply from the Woxna project in central Sweden. The new partner has well-es- tablished design, build and operational capabilities in high purity graphite production. Product from Woxna has been shipped to China and detailed bench-scale test work is under way to enhance the high-purity fowsheet. Planned work will verify all technical aspects of the purif- cation process and defne economic parameters. The Chinese partner selected by Flinders has the ability to supply all key elements of a high-purity graphite plant. The Woxna plant remains at production-ready status and can be restarted in a matter of hours once viable economics return to the graphite market. Alderon changes management team Alderon Iron Ore Corp has made changes to its executive man- agement team. Tayfun Eldem will transition from president and CEO to become vice-chairman while Mark Morabito will move from the executive chairman's role to non-executive chairman and CEO. Tayfun Eldem has been instrumental in advancing Alderon from exploration stage to the point where the necessary regulatory ap- provals have been received, contracts for port and power secured, stakeholder agreements concluded and the company has complet- ed the required pre-construction engineering on the Kami project in the Labrador Trough of eastern Canada, such that it is ready for construction. Alderon intends to commence construction when it has obtained suffcient debt and equity fnancing. Efforts to conclude fnancing will continue to be led by Mark Morabito, who will work with Tayfun Eldem and Alderon's partner Hebei Iron & Steel Group Co Ltd to re-scope the capital and operating costs. New drilling at Native Companion Chinalco Yunnan Copper Resources (CYU) has commenced the next phase of exploration drilling at its Native Companion prospect in northwest Queensland. The program is expected to comprise 10 initial holes totalling 2650 metres of drilling with holes ranging in depth from 150 metres to 500 metres. Native Companion is within the Roseby Trend and falls within the Roseby South Joint Venture with Altona Mining, northwest of the town of Cloncurry. A multi-purpose rig with capacity to drill both reverse circulation and diamond holes has been contracted. The rationale for the drill- ing program is historic shafts and workings; anomalies from previ- ous CYU soil geochemical surveys; strong results from Altona's ro- tary air blast drilling program; strong IP anomalies; and encouraging results from CYU drilling in late 2014. CYU's largest shareholder is China Yunnan Copper (Australia) Investment and Development Co Ltd (CYC) with 63.4%. CYC is a wholly-owned subsidiary of Kunming-based Yunnan Copper Industry (Group) Co Ltd, China's third largest producer of smelted copper product. China investment briefs

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