Gold Valley-chaired Yuzheng Xie has signed a binding term sheet with Queensland-based Macarthur Minerals.
Gold Valley-chaired Yuzheng Xie has signed a binding term sheet with Queensland-based Macarthur Minerals.
Under the deal, the private iron ore miner will be given the opportunity to extract hermatite ore out of Macarthur’s Lake Giles Ularring hematite project, located 420 north-east of Perth - however ASX-listed Macarthur will retain beneficial and legal ownership of all tenements, despite the deal being valid for the life of mine.
The agreement also excludes Gold Valley from being able to mine magnetite iron ore from Macarthur’s Lake Giles Moonshine magnetite project.
From a financial perspective, West Perth-based Gold Valley will pay Macarthur a series of $250,000 cash consideration payments between now and December 31.
Upon Gold Valley extracting and selling 1 million dry metric tonnes of direct shipping from Ularring, Macarthur will receive $5 million.
It will receive an additional $5 million upon another 1 million dry metric tonnes being extracted and sold – along with $1 per additional tonne in royalties thereafter.
Macarthur chair Cameron McCall said the deal was significant for the company.
“This milestone marks a significant initial stride in advancing our valuable iron ore assets in Western Australia into production,” he said.
“The hematite deal serves as a catalyst for this project, as it underpins and derisks the financial viability of the company for the life of mine.
“It represents a pivotal step for Macarthur, bolstering the financial sustainability of our operations throughout the mine’s lifespan as we progress towards bringing our much larger, 1.3 billion tonne Moonshine magnetite iron project to market.
“This hematite agreement signifies the first phase of a multi-stage, multi-generational green iron ore initiative.”
Gold Valley’s deal follows on from news last week that it had been allocated 1.5 million tonnes per annum in export capacity from the Port of Esperance.
Macarthur shares last traded at 6 cents per share, down 2 per cent, as of 11.27am WST.
