Macarthur Signs DSO Purchase Term Sheet With GWR

RNS Number : 3531F

Cadence Minerals PLC

15 July 2021

 

Cadence Minerals Plc

("Cadence Minerals", "Cadence")

Macarthur Minerals (TSX-V: MMS, ASX: MIO) Signs Term Sheet With Iron Ore Producer GWR for Mine-Gate Purchase of DSO.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note that Macarthur Minerals (TSX-V: MMS) (ASX: MIO) (the "Company" or "Macarthur") has announced a partnership with an Australian iron ore producer GWR Group Limited (ASX: GWR) (GWR) under a deal which will enable Macarthur to complete a mine-gate purchase from GWR of up to 400,000 tonnes per annum of Direct Shipment Ore (DSO) product from GWR's Wiluna West Iron Ore Project, located in Western Australia.

Term Sheet for Mine-Gate DSO Purchase from GWR

A binding term sheet signed between the parties paves the way for Macarthur to purchase up to 400,000 tonnes per annum of DSO lump and fines products from GWR at the mine gate for an initial period of 2 years, with the ability to extend for up to a further 2 years.

The sale price for GWR's DSO will reflect an equitable split of the realised sale price on an FOB basis at the ship rail, having regard to Macarthur's costs to transport the product, which will be disclosed on an open book basis between the parties. The term sheet is subject to the parties entering into a definitive agreement following completion of the balance of the route to market arrangements by Macarthur on a basis that is commercially acceptable to both parties.

On 8 July 2021 Macarthur also announced that it had entered into a binding term sheet with Pacific National under which Macarthur has secured up to 400,000 tonnes per annum of rail capacity along the rail line between Kalgoorlie and Esperance, supporting a potential DSO export pathway.

The combination of these arrangements could see Macarthur undertaking transport of a GWR DSO product as early as January 2022 (and potentially sooner, subject to availability of suitable rolling stock). This will provide potential for Macarthur to generate early revenue flows between now and planned commencement of commercial mining operations for DSO at Ularring.

The characteristics of the GWR product may also enable Macarthur to create a physical or virtual DSO blend product with Ularring DSO that achieves improved pricing going forward. Macarthur's iron ore at Ularring is contracted for sale to Glencore under an existing Offtake agreement entered into in 2019.

Ularring DSO Update

Macarthur is continuing to progress planning work for its 'Snark' deposit at Ularring, with the intention of commencing commercial DSO mining operations at the earliest available opportunity. Given the current strength of the global iron ore market, the Company is targeting development of a simple DSO mining operation utilising mobile crushing and screening equipment.

Macarthur has appointed Perth-based consultants Orelogy Mine Consulting to accelerate mine planning work for this operation. The mine planning will be premised on targeting a low capital, fast development scenario.

Initial mining operations will be focused on the Ularring hematite resource, and specifically the deposits located at Snark and Drabble Downs. These deposits are located within fully granted mining leases, which have existing Environment Protection Authority ("EPA") approvals. They are also clear of Native Title issues.

The Company also recently made an application for a Miscellaneous Licence covering an area of 74 hectares in the Yilgarn region of Western Australia adjacent to the Snark hematite deposit, to support Macarthur's non-process infrastructure for the planned DSO campaign.

Gary Lyons, Non-executive Chairman of GWR Group Limited commented: "On behalf of the entire GWR team, we are excited to be developing upon our relationship with Macarthur Minerals Ltd, having taken our flagship high-grade C4 Iron Ore deposit into production earlier this year, with this agreement the future looks very bright for Macarthur Minerals to enter the ranks in the near term of ASX Iron Ore producer.

The opportunity to enter into a mine-gate sale with Macarthur Minerals provides an opportunity for GWR to increase its export tonnage over and above its planned tonnage without impacting upon its current operations, whilst providing Macarthur Minerals with the opportunity to kick-start its Hematite mining operations at Ularring."

Andrew Bruton, CEO of Macarthur Minerals commented: "Macarthur and GWR have enjoyed a very collaborative relationship over the last couple of years, and both companies understand the importance of co-operating to achieve our respective objectives in the region.

The deal has the potential to enable GWR to realise value for its product by providing additional export capacity. From Macarthur's perspective, GWR's offer to enter into a mine-gate sale arrangement can facilitate early revenue flows for Macarthur between now and commencement of commercial mining operations for DSO at Ularring whilst also providing the potential for Macarthur to create a physical or virtual DSO blend product that achieves improved pricing for its Ularring DSO following commencement of planned commercial mining operations there.

The deal with GWR provides opportunities that can benefit both companies, and Macarthur is grateful to GWR for the opportunity to partner with it. We look forward to a mutually beneficial collaboration which we hope will develop into a broader co-operation that can help realise the untapped economic potential of the Yilgarn region and deliver sustainable jobs and economic benefits for the region and for the State of Western Australia into the future."

Link here for the full announcement: https://finance.yahoo.com/news/macarthur-signs-term-sheet-iron-120000310.html  

Cadence Minerals Holding in Macarthur

Cadence holds approximately 1% of the issued equity interest in Macarthur, which is an Australian mining exploration company focused primarily on iron ore, nickel, lithium and gold in Western Australia. It also has a lithium project in Nevada, USA.

This news release is not for distribution to United States Services or for Dissemination in the United States. 

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For further information: Cadence Minerals plc   [phone] Andrew Suckling Kiran Morzaria WH Ireland Limited (NOMAD & Broker)   [phone] James Joyce James Sinclair-Ford Novum Securities Limited (Joint Broker)   [phone] Jon Belliss

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ''believe'' ''could'' "should" ''envisage'' ''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding Cadence Minerals Plc's future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.

 

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