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Mineral Resources Makes Superior Bid for Cazaly’s Parker Range Iron Ore Project

Mining News - Published on Fri, 23 Aug 2019

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Lithium and iron ore miner Mineral Resources looks like it will be trumping Gold Valley Iron Pty Ltd in its bid to secure Cazaly Resources’ Parker Range iron ore project offering Cazaly USD 20 million for the asset in addition to royalties. The offer outbids Gold Valley, which said it would pay USD 13 million plus royalties for the asset back in June. Cazaly revealed this morning that due to Mineral Resources’ superior offer, the agreement with Gold Valley has now been terminated, with Cazaly to pay a USD 250,000 break fee.

The offer

Mineral Resources has provided a binding heads of agreement offering Cazaly USD 20 million for the iron ore asset as well as a royalty of USD 0.50 per tonne of iron ore produced from the tenements after the first 10Mt.

However, the agreement remains conditional on a 21-day due diligence period and requisite shareholder and regulatory approvals. The companies plan to execute a more comprehensive agreement within 30 days.

Parker Range lies about 85 kilometer from Mineral Resources’ Koolyanobbing operation, which produces 6 million tonnes per annum of iron ore, with output expected to increase to 7.5Mtpa in early 2020.

Parker Range iron ore project

In an updated definitive feasibility study earlier this year, Cazaly revealed it would cost about $130 million to develop Parker Range, which is located in Western Australia’s Yilgarn and has key approvals in place to begin production. The project has a proven and probable ore reserve of 31.4Mt to produce an iron ore fines product grading 56.4% iron.

An original DFS was revealed for the project in 2011 estimated annual production of 4.2Mt of iron ore fines.

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Posted By : Sanju Moirangthem on Fri, 23 Aug 2019
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