Australian miner Cyclone Metals has announced that it has inked a memorandum of understanding (MoU) with Brazilian iron ore miner Vale for the development of its Iron Bear iron ore project in Canada.
Accordingly, in the first phase, Vale will allocate $18 million to fund a preliminary feasibility study, drilling activities and environmental studies. In the second phase, the Brazilian miner will form a joint venture (JV) with Cyclone Metals, initially having a 30 percent equity in the project, with an option to increase its equity to 75 percent once it decides to mine or its contribution amounts to $120 million. Also, following its decision to mine, Vale will be able to acquire the remaining 25 percent equity in the JV from Cyclone at a fair market value, subject to the approval of the latter’s shareholders.
The Iron Bear project is estimated to have 16 billion mt of iron ore with iron content of 29.3 percent Fe.
As SteelOrbis reported previously, in September this year Cyclone had commenced direct reduction (DR) grade pellet production at the given project.
