The memorandum of understanding with the Orla people sets out the process for negotiations, scope of negotiations, establishes an agenda and confirms a timetable to complete negotiations for a future agreement.
Speewah has previously secured clearance under the Aboriginal Heritage Act in relation to sacred sites outlined in 2010 over the Central Deposit, which is the proposed location for mining to begin.
The company has begun negotiations with the Orla people and expects to complete a mining agreement during 2012.
Highlighting the progress being made by Speewah, the company has almost tripled the value of its namesake project to US$1.4 billion in a recent Scoping Study, compared to mid-2010 when it was just a vanadium project.
The Speewah tenements contain Australia's largest titanium-vanadium in magnetite deposit with combined Measured, Indicated and Inferred Resources of 4.7 billion tonnes at 0.3% vanadium and 2% titanium.
The Resource contains a high grade component that includes 181 million tonnes at 0.37% vanadium and 2.1% titanium in the Measured category and 404 million tonnes at 0.35% vanadium and 2.1% titanium in the Indicated category.
It is the largest resource of its type and style in Australia by some 10 to 15 times.
What's particularly unique about the Speewah deposit is the extremely high grades of vanadium and titanium found associated with magnetite.
The grades are world class and sometimes more than double what other projects are showing elsewhere in Australia.
From work Speewah has done the company has seen the potential to recover titanium and iron could more than multiply the project's value.
Project parameters include a target production of 75,000 tonnes per year of titanium and 12,400 tonnes per year of vanadium, with by-products of 410,000 tonnes of hematite and 200,000 tonnes of ammonium sulphate, at a strip ratio of 0.5.
Production of concentrate feedstock per year is estimated at 550,000 tonnes at metallurgical recoveries of 91.1% of titanium, 94.6% of vanadium and 97% of iron.
Importantly, the purity of the end products is extremely high at plus-99% for the titanium, vanadium and iron.
Stage 1 of the project involves mining and beneficiation to produce a concentrate with grade targets of 14.9% titanium, 2.4% vanadium and 54% iron.
Stage 2 involves treating the concentrate feedstock through a mixed chloride leaching process. The valuable metal oxides leached into solution can be recovered by solvent extraction into very high grade products.
In December of 2011 Atlas Iron (ASX: AGO) sold the Balla Balla iron, vanadium, and titanium project hosting a resource of 456 million tonnes at 45% iron, 0.64% vanadium, and 13.7% titanium to Forge Resources (ASX: FRG) for $40 million and a royalty.
Atlas Iron completed a Definitive Feasibility Study with a CAPEX of $1.2 billion to process 6 million tonnes of ore per year, to produce magnetite concentrate and ilmenite by-products for revenue of $700 million and an EBITDA of $435 million.
Speewah requires a much smaller CAPEX of $896 million that produces an EBITDA of $210 million, and can be funded and developed in stages over a resource that is 10 times larger.
Speewah has an enterprise value of about $20 million, whereas Balla Balla carries an enterprise value of $40 million plus a royalty, and is clearly undervalued.
The Speewah project has a much longer mine life, along with potential to become a multi-commodity development opportunity with very significant exploration upside that includes fluorite and may include copper, gold, silver, and possibly platinum group elements.
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