- Aspire Minning (AKM) has signed a non-binding memorandum of understanding (MoU) with Sinosteel Equipment and Engineering for the early development of Ovoot Coking Coal Project
- The agreement covers potential engineering, procurement, construction (EPC) and trade-based funding opportunities for the Ovoot project
- Aspire remains steady on the market today and is selling shares for 1.3¢ apiece
Aspire Minning (AKM) has signed a non-binding memorandum of understanding (MoU) with Sinosteel Equipment and Engineering for the early development of Ovoot Coking Coal Project.
The agreement covers potential engineering, procurement, construction (EPC) and trade-based funding opportunities for the Ovoot project.
Ovoot is located north-west of Mongolia. It is classified as a "Fat" coking coal under the Chinese coking coal classification system.
This coal category provides high fluidity coals with good plastic and excess caking properties which are used to blend lower quality coking coals.
Sinosteel and Aspire will enter into talks regarding EPC-based funding and trade-based financial solutions.
Ovoot's pre-feasibility study includes the construction of 5 million tonnes per annum of coal handling and preparation plant at an expected cost of $54 million (US$37 million).
Trade-based financings include future metallurgical coal sale pre-payments and/or a streaming funding facility whereby development capital can be raised on a basis that is non-dilutive to existing equity holders to help fund for the mine.
Under the MoU, Aspire will share information about the project to Sinostell. this information includes mine development, permitting and licenses, transport logistics, project financing, cash cost analysis and situational updates.
"Sinosteel will also support Aspire to access its Coal Trading Platform, which can be used to sell coal on a spot basis in China," the company told the market.
This announcement comes after a $33.5 million placement with major shareholder Mr Tserenpuntsag, who now owns 51 per cent of the company.
Aspire is completing a definitive feasibility study, which is expected to be finalised around May 2020.
Assuming finance is secured and all permits received by the first quarter of 2020, Aspire expects to commence pre-stripping of waste at Ovoot from Quarter 3 2020.
Executive Chairman David Paull is pleased with the agreement.
“Aspire recognises the importance of having a strong partnership with companies like Sinosteel MECC that play such a major role in the Chinese steel industry, the main market for Ovoot’s high-quality coking coal product," David said.
"We look forward to working alongside Sinosteel as one of our key partners in bringing the Ovoot Early Development Project into production and delivering value for all shareholders," he added.
Aspire remains steady on the market today and is selling shares for 1.3¢ apiece at 3:30 pm AEDT.