(MENAFN - ProactiveInvestors - Australia) South American Iron & Steel Corporation (ASX: SAY) has signed an agreement with Prideful Asset Management for the supply of equipment to progress the development of the company's Put iron sands concessions in Chile.
Prideful Asset Management will provide all of the necessary mining equipment including sand dredging equipment, dredging equipment, dry ore magnetic separator, sand crusher and sand washing equipment.
Preparations are underway to ship plant, machinery and mining equipment in 12 containers with delivery to the Put concessions slated for late January 2013.
Both parties will jointly develop the concessions with a plan to produce 2 million tonnes of iron sands concentrates within two years and 5 million tonnes of iron sands concentrates within four years.
Under the agreement, Prideful Asset Management will operate and mine iron sands for South American Iron in the Put concessions, with works including production management, equipment maintenance, and technical support.
Prideful Asset Management will provide finance for all the costs and expenses in relation to the production of iron sands concentrates, and solely bear the cost of all plant, machinery and mining equipment.
The two companies will share equally the profits from the sale and production of iron sands concentrates.
Sinotech Minerals Exploration Co and Qingzhou Yongsheng Sand-digging Machinery Co recently visited the Put concessions.
Sinotech is a renowned Chinese State-owned geological exploration group which has technical personnel already present in Chile working on other projects.
The company undertook site surveys which earmarked Trinchera, which accounts for less than 20% of the Put concessions, as the area ideal for production of iron sands concentrates.
Following Sinotech's visit, the company confirmed it would continue to work with South American Iron to develop its Chilean iron sand project.
Sinotech's site survey report highlighted the significant amount of iron sands available and the enormous commercial potential of Putu.
Meanwhile, Qingzhou Yongsheng Sand-digging Machinery Co assessed and determined the type of plant, machinery and equipment appropriate and suitable for the production of iron sands concentrates in the Trinchera area.
The company has since been designing and modifying plant, machinery and equipment appropriate and suitable for the production of iron sands concentrates in readiness to ship to the concessions.