NFC granted exclusivity period to assess Barrambie Vanadium Project
May 17, 2010
Reed Resources has entered into discussions with China Non-ferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd (“NFC”) which, if successfully concluded, would allow for the development of Reed’s Barrambie Vanadium Project,
The discussions to date specifically covers an engineering procurement & construction contract and project financing,
The approach to Reed Resources has been facilitated by Western Australian engineering and construction company Arccon (WA) Pty Ltd (Arccon), and
Reed has agreed to deal exclusively with NFC and Arccon until 31 August 2010.
Australian diversified resources company Reed Resources Ltd (ASX: RDR) (“Reed” or “the Company”) is pleased to announce that it has entered into discussions with China Non-ferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd (“NFC”) which, if successfully concluded, would allow development of Reed’s Barrambie Vanadium Project in Western Australia.
The proposal received specifically relates to the provision of an engineering procurement and construction contract and project financing assistance by NFC for Barrambie, which is recognised as one of the world’s highest grade vanadium deposits.
Reed completed a two year AUD$20M definitive feasibility study for Barrambie in 2009 which forecast average earnings per annum in excess of AUD$100m at the current vanadium price. Importantly it is highly geared to any increases above the current price of US$34/kg (see ASX announcement dated 5 May 2009).
Reed has agreed to deal exclusively with NFC and Arccon regarding a development and financing proposal for Barrambie until 31 August 2010.
The approach by NFC has been facilitated by Arccon (WA) Pty Ltd (“Arccon”), a leading engineering and construction company servicing the mining and commercial building sectors of Western Australian.
The discussions are at a preliminary stage. No party is under any obligation to proceed and there is no certainty that a transaction will eventuate.
Reed will keep the market informed should anything of a more formal and or complete nature be received.