Metro Mining Ltd (ASX:MMI) has received its first payment from off-take partner Xinfa Group as its first two shipments of bauxite have successfully arrived in China.
Xinfa is one of China’s largest integrated aluminium companies, with significant refining and smelting operations across multiple provinces.
With the successful first shipments all being delivered to Xinfa as planned, Metro is experiencing increasing buying interest for bauxite from its Bauxite Hills Mine in north Queensland.
READ: Metro Mining on track to load targeted 10,000 tonnes of bauxite per day following first shipment
Metro’s managing director and CEO Simon Finnis said: “Receiving first sales revenue is another exciting milestone for Metro and heralds in a new era for us.
“I’m pleased with our ramp-up and the improvement in mining and loading rates from pit to ship as the commissioning issues are steadily resolved.”
Attractive sales price achieved
Metro has a four year binding off-take agreement to supply Xinfa with one million tonnes in the first year followed by two million tonnes per annum for each of the next three years.
Pricing under the off-take agreement is confidential but is linked to a well-established alumina price index.
This price index is currently at high levels and provides Metro with an attractive premium sales price relative to the spot bauxite market prices.
Ramp-up activities are accelerating
Ramp-up activities at the Bauxite Hills Mine are accelerating, with commissioning issues being steadily resolved and a number of planned operational improvements being implemented.
Mining and barge loading rates are continuing to trend higher, with bauxite loaded from site to ship now averaging over 6,000 tonnes per day.
The transhipment process has performed in line with expectations, with no operational issues recorded.
Based on planned mining and shiploading rates, Metro expects to achieve its targeted production rate of around two million tonnes for the calendar year 2018.