The deal with Starlight Investments for its 6 per cent stake put a value on the project of $166 million.

Hawsons chairman Brian Granzien said Starlight had not been meeting the demands for cash injections since November last year.

“Starlight has not been paying their cash calls, which we are paying and will have to continue to do, so this does involve some additional cost but we see the true value as significantly more than the $10 million we are paying,” Granzien said.

“The $10 million sale price represents a full reimbursement of their contributed capital as well as a modest premium which partly recognises upside value foregone.”

Granzien said the company was also in negotiations for offtake from the project and there were some companies that were interested in taking an equity stake in either the project or the company.

He said ending the joint venture opened up opportunities for the consideration of high quality joint venture partners “if, or when, we wish to”.

“The off-take and end-user selection process is exactly where we had planned it to be and we will keep the market updated as this selection process moves closer towards its final stages.”

He said the buyout would allow the company manage the bankable feasibility study and the subsequent project build more efficiently.

In February Hawsons extended the scope of the bankable feasibility study on the project to incorporate an option of 20 million tonnes a year production rate, which was expected to significantly improve the economics.