AKIPRESS.COM - Aspire Mining has secured a non-binding agreement with Sinosteel Equipment & Engineering to develop the Ovoot coking coal project in Mongolia, the Australian Technology reported.

After the Perth-based coal mine’s most recent $33.5 million placement by shareholder Tserenpuntsag Tserendamba, priced at 2.1 cents, increasing Tserenpuntsag’s holding from 27.5 per cent to 51 per cent.

The company’s $41 million in the bank alongside no debt positions Aspire to advance the first-stage development of its Ovoot coking coal project in northern Mongolia.

Additionally, Tserenpuntsag has provided commitments to Aspire of loan guarantees of up to $100 million to complete ODEP’s construction and development.

Aspire’s financial gain is further enabled by Sinosteel’s most recently announced non-binding agreement, which covers potential engineering, procurement, construction and trade-based funding opportunities for the Ovoot Early Development Project (OEDP).

Sinosteel and Aspire are entering into further discussions regarding the construction of a coal handling and preparation plant anticipating a cost of $US37 million ($54.1 million).

The companies are delving into trade-based financing regarding future coal sale pre-payments and a streaming funding facility to raise development capital.

The condition of Aspire’s agreement with Sinosteel will require the company to share information on the mine development with Sinosteel pertaining to permitting and licenses, transport logistics and project financing.

Aspire executive chairman David Paull said, “Aspire recognises the importance of having a strong partnership with companies like Sinosteel MECC that play such a major role in the Chinese steels industry, the main market for Ovoot’s high-quality coking coal product.”

“We look forward to working alongside Sinosteel MECC as one of our key partners in bringing the Ovoot Early Development Project into production and delivering value for all shareholders.”

The most updated ODEP Pre-feasibility Study includes a capital estimate of $US260 million.

Aspire’s definitive feasibility study is scheduled to be finalised around May 2020.