The South Australian-based project, 80% owned by Pima Mining NL and the balance by Resource Finance Corporation, is one of several domestic participants trying to establish a commercial magnesium industry in Australia.
Pima will receive the capital in early October to ensure the company has adequate and timely funding for the bankable feasibility and financial close, scheduled in the first quarter of 2001.
“Effectively this provides us with finance, plus some, for the bankable feasibility,” Pima chairman Pat Elliott said.
“The SAMAG project is tracking along quite well with everything falling into place for the end of the year.”
SAMAG is planning to produce 52,500 tonnes per annum of magnesium from a plant to be located at Weeroona, 8km north of Port Pirie.
The project gained a major break earlier this year when Pima secured an exclusive worldwide license for Dow Chemicals’ magnesium process technology.
Capital costs of the SAMAG operation are projected at US$375 million at cash operating costs of less than US60c per pound.
Elliott said further design engineering is currently being undertaken and he was confident both capital and operating costs would be fully reduced at bankable feasibility.
