Having signed a Letter of Intent (LOI) with Hitachi Construction Machinery (Australia), Rex Minerals Ltd (RXM:ASX) has completed a crucial operational preparedness stage for the Hillside Copper-Gold Project.
This LOI covers HCA’s distribution of Ultra-class mining machinery to Rex. Four excavator units with weight capacities between 250 and 600 tonnes and twelve haul trucks with a capacity of 300 tonnes are included in the equipment, which will cost more than $100 million.
In order to meet the project deadline and ensure the availability of essential mining equipment, this LOI locks in the build slots for certain lengthy lead time products.
All options for financing and operating models, including permitting the equipment to be assigned to a third-party mining services provider should Rex chose to do so, remain open to Hillside notwithstanding the LOI’s preliminary specs and pricing.
HCA intends to offer South Australian-based facilities and after-sales support in addition to the Ultra-class fleet. This assistance will include equipment service, technical support, employee training using simulation, and part inventory.
The following statements were made by Richard Laufmann, the CEO of Rex:
“This strategy of locking in the fleet via an LOI secures the Ultra-class fleet for Rex without any immediate financial commitment, and ensures that we can push forward with and adhere to our project timeline”
In addition to reaching this significant milestone, the company continued to advance the Hillside Project on a number of fronts, according to the statement. This covers design engineering, debt financing, and project equity partnerships.
Below is a summary of each’s current situation.
Hillside Partnering Process: The Company started a formal Minority Partnering Process on February 6, 2023. The goal completion date for this process, which is being managed by Macquarie Capital, is set for mid-CY2023 to coincide with the operational engineering projects. Tier 1 mining firms, private equity firms, copper smelter-refiners, and metals trading firms have all expressed a lot of interest. Over the next month, prefered parties are expected to advance.
Senior Debt Funding Process: This is taking place concurrently with the partnership process, and Tier 1 project finance lenders to Australian miners, including domestic and foreign large banks, have shown a lot of interest. Additionally, Rex has considerable capital expenditures at Hillside that may qualify for funding assistance from export credit organisations thanks to its supplier partners. Behre Dolbear Australia has been chosen to serve as the Independent Technical Expert (ITE) of the Lenders, performing technical due diligence and creating an ITE report appropriate for funding.
Hillside Engineering: The project engineering is moving along nicely, with the detailed engineering for the process plant and related infrastructure currently 30% complete. By the middle of CY2023, the strategy still needs to be considerably engineered.