Vancouver-based Eldorado Gold has a memorandum of understanding from BHP Billiton with regards to a sales contract for production from the company's Villa Nova iron ore project in Brazil and has recently received an expression of interest from another party, president and CEO Paul Wright said on Thursday. The agreement with BHP Billiton is for 100% of production in the first three years of operations.
Mr Wright said that the firm is not under any pressure to agree to contract terms, and is prepared to bide its time to ensure that it receives a good price for its iron-ore as he believes that the iron-ore market has reached a bottom,
“We want to see material benefits from this operation in any sales contract,” he told analysts and investors on a conference call.
The company is prepared to “sit on the project” for three to six months in order to realise an acceptable profit margin.
The Villa Nova mine in will be completed and commissioned during the first quarter of this year and will have an average annual run-of-mine production rate of 1-million tons of ore, for a nine-year mine life.
Eldorado, which mines gold in Turkey and China, reported fourth-quarter net earnings of $101.2-million on Thursday, compared with a loss of $9.1-million a year earlier.
Source: Mining Weekly
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