21st Mar 2019 13:37
LONDON (Alliance News) - Cadence Minerals PLC on Thursday said Macarthur Minerals Ltd has signed an off-take agreement with Glencore International AG for the sale of iron ore produced at the Like Giles project.
Shares in Cadence were up 43% at 0.16 pence early on Thursday afternoon.
Cadence holds a 10.1% interest in Macarthur, which in turn owns the Western Australian Lake Giles iron project.
The ten-year binding life-of-mine agreement commences with commercial production at Lake Giles, and is for 4 million tonne per annum on average. The deal can be extended for another 10 years for all tonnes of future Lake Giles iron ore.
Glencore has agreed to release as much as 70% of their off-take volume where Macarthur obtains project funding from an investor, provided off-take for the product is secured.
The Glencore deal will allow Macarthur to move forward and complete its project financing and is valued at around USD4 billion in revenue for the first ten years
Cadence noted that metallurgical test work at the Moonshine Magentite Project in Lake Giles has indicated that an export product of high margin 65% iron is possible and that Macarthur had quoted the price of 65% iron product at USD98 per tonne.
Cadence Chair Andrew Suckling said: "It is gratifying to see that the confidence of the Cadence management team in its investment strategy into Macarthur Minerals means that our company can now participate in a transformational take off agreement between Macarthur and Glencore, one of the largest mining conglomerates in the world."
"We congratulate the Macarthur Minerals management team on achieving this key milestone."
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