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Diatreme Resources Limited (ASX:DRX) announced today about the appointment of specialist corporate advisers Blackbird Partners with the focus on ensuring maximum shareholder benefit from the companyâs flagship Cyclone Zircon Projectâs in Western Australia.
The appointment of Blackbird follows previous yearâs positive DFS for Diatremeâs flagship project as announced on 15Novemebr 2018, reflecting positive after-tax financial results, including an estimated NPV of A$113 million, an internal rate of return of 27% and capital payback with three years, with an estimated mine life exceeding 13 years.Â
After releasing the DFS successfully, Diatreme has begun the process of engagement with potential development partners with the assistance of study authors China ENFI Engineering Corporation (ENFI) under the terms of the âCooperation and Consulting Servicesâ agreement signed with Diatreme as announced on 11 January 2018, with a goal of securing major development partner(s) as soon as possible.
In addition to ENFIâs assistance, Australia-based Blackbird has now been engaged to provide specialist corporate and financial advisory services to Diatreme to facilitate and optimize commercial outcomes from the projectâs development and the work being undertaken by ENFI.
Diatremeâs Chairman, Mr. Greg Starr said Blackbird offered the necessary experience and industry knowledge to ensure a successful outcome for shareholders. He further added that following the recent release of Cycloneâs DFS undertaken by ENFI Engineering and their ongoing assistance in sourcing potential project investing parties, they acknowledged the need to hire a specialist corporate advisory firm with experience in the heavy minerals sector. The step was taken to make sure that they would attain the best commercial and financial result for Diatreme from the development, joint venture or sale of Cyclone. They have identified the Blackbird team as eminently suitable for this task and look forward to their assistance in transitioning the project through the final stages and unlocking its value for the benefit of all stakeholders.
Blackbird has been appointed to handle a structured, formal procedure to start and progress a detailed scope of work focussed on assembling strategic third-party interest for the funding and development of the Cyclone project. It includes detailed assessment and evaluation of future offers for participation in the project via direct investment, joint venture or project sale which includes sourcing, structuring, and pricing of potential debt or similar structured financial instrument to ensure the economic development model and returns are optimized for Diatreme shareholders. Blackbird will also further assist the company with relevant parties through to financial close.
CEO of Diatreme, Neil McIntyre said that the latest initiative for Cyclone shows their determination to advance the projectâs development as quickly as possible, as recommended by ENFI, taking advantage of the market opportunity for high-grade zircon. Together with their current progress at the Galalar Silica Project in North Queensland, which has been proven capable of producing premium-grade silica, they are looking forward to a successful year ahead for Diatreme in delivering increased shareholder value. Going forward Diatreme will continue to keep shareholders and other stakeholders informed about the process.
The shares of DRX closed the dayâs session at A$ 0.014, down by 17.65% on 23rd January 2019 as compared to the previous close of A$0.017.
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