Australian miner Fenix Resources Ltd has announced it has signed a binding right-to-mine agreement with Sinosteel Midwest Corporation Limited (SMC), a subsidiary of China Baowu Steel Group, granting Fenix an exclusive 30-year right to mine and export iron ore from the Weld Range hematite iron ore project in Western Australia.
Located adjacent to Fenix’s existing Iron Ridge iron ore mine, the Weld Range project is home to a series of high-quality ore deposits, including the Beebyn-W11 iron ore mine.
Key details of the Weld Range project
The Weld Range hematite iron ore project has a total mineral resource estimate of 290 million mt, with an average grade of 56.8 percent Fe. This makes it one of the largest high-quality deposits in the region.
A major component of the project is the Beebyn-W11 deposit, which alone contains 20.5 million mt of ore at a grade of 61.3 percent Fe. This deposit is already covered by a previously announced 10-million-mt mining agreement between Fenix and SMC.
With the combination of the Weld Range Right to Mine Agreement (RTMA) and the Beebyn-W11 RTMA, Fenix Resources now holds the exclusive rights to mine and export all iron ore from the Weld Range project.
Financial commitments and profit-sharing
The financial details of the agreement are as follows:
Cash consideration: US$60 million over 24 months
- $20 million upfront
- $20 million after 12 months
- $20 million after 24 months
Production royalty: $4.00-5.00 per dry metric tonne, depending on production volume and ramp-up stage.
Profit share: