Adamas has an 85% shareholding in Future Metal (formerly known as Hong Kong Mining), representing its largest investment by value in the portfolio.
Future Metal said the processing line has been installed at its quarry in Xi County, Linfen City, in the Shanxi Province of China and the initial run of the processing plant has been successfully conducted.
The equipment and transmission system are working well with about 200 tonnes of dolomite produced during the initial run. Further ramping up of production commenced in the third week of December and production is on track to achieve the daily production target of 800 to 1,000 tonnes over the coming quarter.
By the middle of next year. Future Metal’s management team expects daily production capacity to reach around 2,000 tonnes due to increased operational efficiency to be extracted from the current configuration of equipment onsite. The actual level of output will be configured based on contracts for the sale of the product, which management will look to secure in the first half of 2020.
The success of the initial production run has encouraged the company to construct a steel structure to enclose its stockpile; install dust removal equipment and commence the process of land hardening to comply with the local environmental requirements.
Future Metal entered its first sales contract on 30 November 2019 with a local construction company for an order of 1,000 tonnes of wall rock at a price of RMB48/tonne (US$6.80/Tonne). Meanwhile, the quarry has also been contacted by other potential buyers with respect to the availability of its products now that initial production has commenced.
"We are pleased to have commenced production at the quarry and begun initial sales of Future Metal's products before the year-end as planned,” said John Croft, the chairman of Adamas.
“Full production is continuing to ramp up well with strengthening levels of interest from potential buyers of the quarry's products with prices in line with previous guidance given by the company,” he added.