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IMX Resources agrees to interim funding arrangements for Cairn Hill

IMX Resources (ASX: IXR) has agreed to sole fund joint venture partner Taifeng Yuanchuang International Development Company’s immediate operating costs for the Cairn Hill iron ore and copper mine until the end of January while Taifeng undertakes its own review of the operations.

Taifeng has requested time to consider the impact of recent Termite Resources’ management reviews of the operation, the generation of a revised work plan and an independent external review of the Cairn Hill mining operations, before approving the recommendations and making further contributions to the business.

Cairn Hill is operated by joint venture entity Termite Resources, which is owned by Outback Iron (51% IMX/49% Taifeng).

As a result of Taifeng’s decision, IMX will contribute Taifeng’s 49% share of cash calls on a preferential loan basis to Outback Iron and will recover this loan from Taifeng.

The Cairn Hill Mining Operations review was commissioned by Neil Meadows immediately after he began his role as managing director of IMX Resources in late November 2011.

The review identified significant operational opportunities, including a revision of the mine plan, which is expected to substantially enhance the profitability of the Cairn Hill mining operations over the life of the mine.

Meadows said, “IMX Resources will work expeditiously with our joint venture partner to gain agreement on the best way to optimise the value of our mining operations at Cairn Hill.”

Last week, IMX announced it had intersected visible magnetite quartz and magnetite gneiss mineralisation 25 kilometres southeast of the Cairn Hill mine in South Australia.

The company conducted an initial six hole reverse circulation drilling program at the Tomohawk target, with all six holes intersecting visible wide intervals of mineralisation.

Tomohawk was identified from an airborne geophysical survey in 2011. It was the strongest magnetic anomaly in the area south of Cairn Hill.