(MENAFN - ProactiveInvestors - Australia) Kupang Resources (ASX: KPR), through the 55%-owned Kupang Joint Venture, has cemented a port access deal for the stockpiling and export of dry bulk manganese from the deep water Tenau port in Kupang.
The joint venture has received the final signed Joint Operation Agreement, which allows for 12-month access for the export of 80,000 tonnes per month of processed manganese oxide.
The Kupang Joint Venture is in the final stages of obtaining permitting and approval from the relevant authority to finalise the commissioning and initiate operation of its acquired process plant.
The joint venture's own production licence and the third party supply of 30,000 tonnes locally mined raw manganese, under the previously announced Manganese Society supply agreement, will allow the production of about 30,000 tonnes per month of processed manganese oxide lump.
This production will be blended to target a greater than 80% pure manganese oxide product for sale into the global manganese market.
The product will be suitable as a high grade blending agent for the ferro and silco manganese smelting industries and has the purity for potential sale directly into the expanding manganese battery market.
The Joint Operation Agreement allows for five days priority loading to a shared wharf at the deep water Tenau port in the Kupang harbour.
This facility, which can accept vessels up to the Handiamx 45,000 tonne size, is provided to the Kupang Joint Venture while a permanent manganese only export facility is being constructed at the port adjacent to the Kupang Port manganese stockpiling facility.
Once constructed, the joint venture's manganese loading operation will move to the new facility freeing up the general cargo wharf.
Analysis
Kupang's share price has increased 49% since Proactive Investors said on 11 February 2013: "Kupang is very lightly valued by the market at just 11 million with 3.6 million in cash at the December 2012 quarter, for a company moving to producer status."
We expect this trend to continue as Kupang transitions from a junior manganese explorer to producer with the potential to generate cash flows.
This port access deal allows the Kupang Joint Venture, which is controlled by Kupang Resources via its majority interest, to access stockpiled manganese from third party miners who have been unable to export due to a lack of resources or necessary regulatory agreements or permits.
