IMX Resources (ASX: IXR, TSX: IXR, IXR.WT) has fully repaid the Line of Credit with LinQ Resources Fund out of continued positive cash flows from the Cairn Hill Mining Operation in South Australia during the December 2012 quarter.
The facility was previously secured by Termite Resources in May and remains in place providing the joint venture with undrawn headroom of A$15 million until 30 May 2013.
Neil Meadows, managing director of IMX Resources, commented: “The repayment of the Line of Credit from continued positive cash flows from Cairn Hill is a tremendous achievement considering the recent downturn experienced in iron ore prices.
“The repayment of the loan facility leaves the joint venture and IMX debt free and will ultimately enable distributions to be made by the joint venture to its shareholders.
“The subsequent cash flows to IMX will be available to continue exploration work at both the Ntaka Hill Nickel Sulphide project and the highly prospective Nachingwea exploration area.”
Cairn Hill JV
IMX Resources operates and owns 51% of the Cairn Hill Mining Operation, where it produces a premium coarse-grained magnetite-copper-gold direct shipping ore product at a rate of 1.8 million tonnes per annum.
The operation has been cash flow positive for all of 2012, with cash costs significantly reduced to $93 per tonne CIF ($77/t FOB).
Cairn Hill hosts an Indicated resource of 3.8 million tonnes at 47.5% iron and an Inferred resource of 4.6 million tonnes at 45.8% iron.
Importantly, there is the potential for low cost capital continuation of Cairn Hill, with a capital estimate for phase two of $5 to $10 million and operating costs of $100/t CIF.
Ntaka Hill
Meanwhile, subsequent cash flows will allow IMX to continue resource expansion within the highly prospective 7 kilometre Ntaka and Lionja ultramafic trend, which is currently underway.
Exploration is focused primarily on near surface disseminated sulphide zones, which yield high recoveries and grade, as well as a clean NiS concentrate.
Ntaka currently hosts a Measured resource of 1.66 million tonnes at 1.71% nickel and 0.29% copper for 28,400 tonnes of contained nickel, and an Indicated resource of 11.12 million tonnes at 1.14% nickel and 0.25% copper for 126,300 tonnes of contained nickel.
It also hosts an Inferred resource of 45.04 million tonnes at 0.3% nickel and 0.07% copper for 135,000 tonnes of contained nickel.
Analysis
The repayment of the A$15 million Line of Credit with LinQ Resources Fund is a major advancement for IMX and the Cairn Hill joint venture, with the operation now completely debt free.
What is even more impressive is this was achieved despite a downturn in iron ore prices.
Not only does this achievement provide the joint venture with undrawn headroom of A$15 million until 30 May 2013, it also means distributions can now be potentially made to shareholders with the joint venture now completely debt free.
Importantly, this means the company will remain well funded to continue exploration work at both the Ntaka Hill Nickel Sulphide project and the highly prospective Nachingwea.
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