Suvo Strategic Minerals (ASX:SUV) has inked a deal with grain supply chain co-operative CBH Group where the emerging kaolin and silica explorer may secure storage infrastructure for its proposed processing plant in the Western Australia’s wheatbelt region.
The company will carry out a due diligence program over CBH’s railway reserve leases at Gabbin and Manmanning which consist of a 20,000 tonne storage shed, road and rail loading facilities, offices, on-site accommodation, power and water connections with excess land for lay down facilities.
If due diligence is successful, Suvo may look to either enter a long-term lease or outright purchase of the facilities.
Suvo will use the 180-day DD period to find out whether the site is suitable to build its proposed kaolin processing facility on ground to the north side of the property. The site is in a strategic location, only 3kms from Suvo’s White Knight kaolin project which has a maiden inferred 31.5mt JORC resource and was recently granted mining access rights.
Suvo Executive Chairman Robert Martin said the deal was a fantastic outcome for not only Suvo’s shareholders but also CBH’s WA Growers and the State Government as it has the potential to derive value for everyone involved.
Suvo can now fast-track our feasibility studies knowing we have access to rail and freight networks, storage facilities and a potential site to construct our processing facilities,” he said.
“Suvo will save millions of dollars and a significant amount of time under this agreement. The local communities will benefit from currently unused facilities being revived and used to help bring jobs back to the area.
“We are grateful to both CBH and the State Government in helping facilitate this mutually beneficial agreement and we look forward to working with them during the next phase of our project’s development.”
News of the exclusive deal sent Suvo’s share price 3.5c or 37% higher to an intraday high of 13c on Wednesday with over 6.4 million share changing hands by 2:30pm AEST.