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Corporate Spotlight

Alara's advanced development and early stage exploration projects in Saudi Arabia (Zinc-Copper) and Oman (Copper-Gold) provides an exciting mix of projects which supports the Company's strategy to unlock value for shareholders.
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Copper mining project

PROJECT UPDATES

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PROJECT UPDATES 

ASX Announcement 25 November 2019 


PERTH: Alara Resources Limited (ASX: AUQ) (Alara or Company) provides updates relating to the Al Hadeetha Copper Project in Oman.


Project Finance - Al Hadeetha Copper Project 

The Company’s project expenses to date have been covered from existing funding sources without the need to draw upon debt finance. Going forward, capital expenditure for the project will include debt finance provided by third party lenders.


As previously reported1 , financing terms have been proposed by various lenders. Al Hadeetha Investments and Al Tasnim Infrastructure, the other shareholders of Al Hadeetha Resources LLC, have now agreed to procure guarantees (Shareholder Guarantees) required to support project finance. Alara will support the Shareholder Guarantees by providing a corporate guarantee. 


The Company has decided not to proceed with the Investment Agreement previously announced2 .


Project Engineering 

As noted in the Company’s last Quarterly Report, McNally Bharat Engineering Company Limited (MBE) experienced delays in completing basic and detailed engineering for a 1 MTPA copper concentration plant3 and associated infrastructure. While waiting for MBE to complete the work, the Company has entered an MOU with another experienced service provider for project execution under a full EPC contract - China National Geological & Mining Corporation. Management is pursuing both options to avoid further project delays and achieve targeted production by end of Q1 2021.


Click here to view the full announcement

OMAN MINING

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EUR 60M INVESTMENT

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AL HADEETHA RESOURCES EXECUTES EUR 60M INVESTMENT AGREEMENT 

ASX Announcement 15 March 2019


PERTH: Alara Resources Limited (ASX: AUQ) (Alara or Company) is pleased to announce that Al Hadeetha Resources LLC has entered a 60 million Euro Investment Agreement with SAMA Global Investment, headquartered in Doha, Qatar.


Under the agreement: 

  • SAMA will invest EUR 60 million (~AUD 96 million) into Al Hadeetha Resources LLC (Al Hadeetha) for development of the Washihi-Mazzaza Copper Project (the Project) repayable by Al Hadeetha; 
  • The investment will be applied principally to fund construction of mine-site infrastructure for a 1mtpa copper processing plant1 at the Project; 
  • Al Hadeetha may also utilise the investment funds to develop other projects as mutually agreed; 
  • An establishment fee of EUR 1 million (~AUD 1.6 million) will be paid to SAMA;
  • The investment is to be secured over Al Hadeetha's mining licence and related assets; 
  • The Investment Agreement does not include an option for SAMA to convert the investment to equity in any entity; and 
  • Following a 24-month grace period, Al Hadeetha will pay a fee (in quarterly instalments) equal to 1.5% p.a. of the total investment amount over a six-year term (i.e. an eight-year total term).


Alara Chairman James Phipps said: 

“Execution of this Investment Agreement with Qatar’s SAMA Global is a major milestone for Alara and reflects the inherent value of the Washhi-Mazzaza Copper Project and the strength of the Company’s joint venture relationship in Oman. Execution of Alara’s strategy to develop and expand its project portfolio beyond Washhi-Mazzaza will also be strengthened by the SAMA investment.”


Alara Managing Director, Justin Richard commented: 

“The SAMA Investment Agreement was not the only finance offered to Al Hadeetha. In addition to favourable finance terms, the SAMA deal also provides for investment into Al Hadeetha’s other projects, including Mullaq and Al Ajal, which can be developed around the proposed WashihiMazzaza copper processing plant. We expect the relationship with banks and other financiers to be further strengthened by the SAMA Investment Agreement, with other finance options still under consideration for targeted project development opportunities.”


Click here to view the full announcement 

OVERVIEW

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Overview


Alara has demonstrated its capability as a mineral resource developer. With a completed Definitive Feasibility Study on its flagship Khnaiguiyah Zinc-Copper Project in Saudi Arabia and an advanced and comprehensive Scoping Study for its Daris/Washihi Copper-Gold Project in Oman, the Company is poised to transition to a mine builder and operator.

 

Khnaiguiyah Zinc-Copper Project – Saudi Arabia (50%)

  • Alara's 50% interest held via joint venture company, Khnaiguiyah Mining Company (KMC)
  • Heads of Agreement (HoA) signed with United Arabian Mining Company LLC (Manajem) to increase Alara's interest from 50% to 60% ownership of KMC
  • Located adjacent to bitumen road ~200km west of Riyadh (capital city) near major Riyadh to Jeddah highway
  • Comprises 1 Mining Licence (issued in December 2010 with exclusive 30 year term and no mineral royalties), 2 Exploration Licences (granted, pending renewal) and 5 Exploration Licence applications, totalling ~380km2 pending completion of transfer to KMC
  • JORC Reserves (Proved and Probable) reported to JORC 2004 standard of 26.08Mt at 3.3% Zn and 0.24% Cu
  • 2Mtpa Definitive Feasibility Study (DFS) completed in Q2 2013 with projected US$257M capex, 2.8 year pay-back, A$2.074B Life of Mine (LOM) revenues and A$0.873B LOM EBITDA (at base case Zn/Cu prices)
  • Saudi Industrial Development Fund (SIDF) project financing pending submission - potentially up to 75% of construction costs

See more on the Khnaiguiyah Zinc-Copper project

Daris/Washihi Copper-Gold Project - Oman (50-70%)

Alara has completed a Scoping Study centering on the Washihi prospect with inputs from the Daris, Mullaq and Al Ajal prospects. A revised Advanced Scoping Study has been completed.

Washihi Copper-Gold Project

  • Alara's 70% is held via joint venture company, Al Hadeetha Resources LLC
  • Located ~80-160km east of Alara's Daris Copper-Gold Project and comprises 3 Exploration Licences totalling ~105km2 applications for 3 Mining Licences totalling 5.5km2
  • JORC Resource: Indicated 6.84Mt at 0.90% Cu and .017%g/t Au and 7.27Mt Inferred at 0.71% Cu and 0.20g/t Au


Daris Copper-Gold Project

  • Alara's 50% (with right to 70%+) is held via joint venture company, Daris Resources LLC, which holds the exclusive right to manage, operate and commercially exploit the Exploration Licence.
  • Located ~150km west of Muscat (capital city) and comprises a Mineral Excavation Licence of ~587km2 and applications for 2 Mining Licences totalling 4.5km2
  • JORC Mineral Resource Estimate (Measured and Indicated) of 240Kt sulphide ore at 2.37% Cu and 183Kt oxide ore at 0.72% Cu


 
See more on the Daris/Washihi Copper-Gold project

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