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:: Review Backs Magnesium International Project
The South Australian government has reaffirmed its $25 million commitment to Magnesium International's two-phase, 84,000 tonne per annum SAMAG magnesium smelter project at Port Pirie.
After completing a review of the project's business case, as called for by head of the state economic development board and mining identity Robert Champion de Crespigny, the state government has given Magnesium International the green light.
Magnesium International managing director Gordon Galt said the government review was comprehensive, examining the engineering package, technology, capital and operating cost estimates and proposed financing.
"It is difficult to conceive what else they could have looked at," Galt said.
"Magnesium International had no input into the terms of reference for the review so we cannot be accused of biasing either the investigation or the result.
"It is a relief to have this review out of the way with regards to the pain it caused our shareholders but in saying that we knew this would be the result all along.
Galt said he hoped confirmation of the state government's involvement with the project would be a stepping-stone to receiving federal government backing.
However, Galt said the focus now was to get an engineering, procurement and construction contract in place and finding further cornerstone investors to join contractors Thiess, which has agreed to provide $20 million in equity.
As for the company's $8.3 million capital raising, which fell $5.4 million short earlier this month, Galt said the company was in talks with several investors who expressed interest in taking on some of that shortfall once the state government review had finished.
Magnesium International has also submitted a new proposal to the CSIRO to reopen the door for a magnesium sheet business the two parties were working on prior to the stalling of the capital raising.
"CSIRO is considering our new proposal and hopefully we will hear back from them next week," Galt said.
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