MEC Resources Ltd. disclosed Monday that investee Advent Energy Limited (Advent) has signed a Letter of Intent (LOI) with Northern Minerals for potential future supply of gas to their Browns Range heavy rare earth element project in north-eastern Western Australia.
Advent's major shareholders remain MEC Resources, BPH Energy, Talbot Group and Grandbridge.
The non-binding LOI provides an initial framework for discussion, information sharing and negotiation towards a possible gas supply agreement.
Commenting on the LOI, Advent's Executive Director David Breeze stated:
"This is an excellent development for Advent and its key onshore Bonaparte Basin assets EP386 and RL1 in the drive for their commercialization. Partnership with a nearby heavy rare earths project of global significance demonstrates an exciting future for the shareholders of both parties. We look forward to working towards an objective that will have considerable benefits to both Advent and Northern Minerals."
A 2C Contingent Resource of 11.5 billion cubic feet (Bcf) (1C is 0.3 Bcf and 3C is 45.8 Bcf) for the Weaber Gas Field (RL1) has been assessed by an independent third party as a component of Advent's drive to commercialize its 100 percent owned onshore Bonaparte Basin assets. Included in these assets in EP386 recoverable resource estimates range from 53.3 Bcf (Low) to 1,326.3 Bcf (High) of Prospective Resources, with a Best Estimate of 355.9 Bcf of gas. The rapid development of the Kununurra region in northern Western Australia, including the Ord Irrigation Expansion Project and numerous resource projects, provides an exceptional opportunity for Advent to potentially develop its nearby gas resources for the benefit of the region along with Advent and its shareholders.
New market studies have identified a current market demand of up to 30.8 terajoules (TJ) per day of power generation capacity across the Kimberly region that could potentially be supplied by Advent's conventional gas projects in EP386 and RL1. In addition, the Federal Government's White Paper on Developing Northern Australia described an estimated increase in electricity consumption of 52 percent by 2018 for northern Western Australia.
The Northern Australia Infrastructure Facility Bill 2016 provides great confidence for an ongoing expansion of the east Kimberly region. The Commonwealth Government is providing a new $3.8 billion (AUD 5 billion) Northern Australia Infrastructure Facility to provide concessional loans for the construction of major infrastructure such as ports, roads, rail, pipelines, electricity and water supply. This will greatly assist Advent in further market development and potential reduced costs through the government funded infrastructure developments that may improve roads and ports in the vicinity of Advent's EP386 and RL1 resources.
About Northern Minerals
Northern Minerals is focussed on the delivery of rare earth element dysprosium. The company has a large landholding in Western Australia and the Northern Territory that is highly prospective for this element. Through the development of its flagship project, the Browns Range Project, Northern Minerals aims to be the first significant world producer of dysprosium outside of China.
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