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IMX Resources partner Taifeng pays up

IMX Resources’ (ASX: IXR) partner Taifeng Yuanchuang International Development has affirmed its commitment to the Cairn Hill Joint Venture, meeting the demand for payment issued on December 1.

Operation manager IMX had previously called on Taifeng to pay its 49% share of expenditure at the Cairn Hill iron ore and copper mine under the Heads of Agreement between the two companies, dated December 29, 2009.

Despite initial indications that it did not intend to pay, Taifeng has now paid the A$4.12 million owed.

IMX Managing Director, Neil Meadows said he was pleased with the outcome of the discussions with Taifeng.

“IMX and Taifeng remain firmly committed to the Cairn Hill Joint Venture and look forward to maintaining a strong partnership into the future,” he said.

The Cairn Hill project is held through joint venture company Outback Iron, which is owned 51% by IMX and 49% by Taifeng.

Cairn Hill is located 55 kilometres southeast of Coober Pedy in South Australia, close to the Darwin to Adelaide railway.

Phase 1 of the project is a unique magnetite iron, copper and gold direct shipping ore project.

In October, IMX reached a milestone when it shipped the one millionth tonne of ore from Cairn Hill, just 10 months after shipping operations began in December 2010.

At the same time, economies of scale were being reached at Cairn Hill, with unit costs per tonne falling as production ramped up. Phase one ore at the operation is expected to deliver 7.9 million tonnes from two pits, generating revenue of A$250 million at current prices.

Cairn Hill phase two has the potential for a low capital and operating cost project, with the company looking to fast track development leveraging off existing approvals and infrastructure.