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Lion One Metals signs agreement for sale of Olary Creek JV interest

Mining News - Published on Mon, 15 Apr 2019

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Lion One Metals Limited announced it has agreed to sell its interests in the Olary Creek magnetite project in South Australia including its 51% tenement interest, a 47% interest in iron ore and manganese rights, and a 100% interest in other commodities. Lion One considers this sale as a means to realise value from this non-core asset.

Lion One will receive payments at certain stages during the course of time including:

1. 10% of all funds raised by the purchaser be paid to Lion One until funding specifically designated as funding for a Bankable Feasibility Study has been raised

2. AUD 1 million to be paid to upon funding designated for a Bankable Feasibility Study

3. AUD 3 million to be paid upon a Decision to Mine

Additionally, and importantly, Lion One will retain a royalty of 1 % FOB plus A$0.75 per tonne sold, or a 2% FOB royalty, on all iron ore or manganese concentrates extracted and sold from the Olary Creek tenement.

This agreement has the potential to deliver considerable future income to the Company through this royalty stream. The Olary Creek project currently contains a JORC and 43-101 compliant resource of 510 million tonnes of high grade magnetite with low impurities, but the Company considers only about 35% of the 7.5km highly magnetic mineralized target has been drilled to date.

The purchasing group consists of two companies owned by Australian mining entrepreneur Gordon Toll, Lodestone Equities Limited and its subsidiary Olary Magnetite Pty Ltd, (collectively known as the Lodestone Group "LG").

Both companies and the Olary Creek project now form part of South Australia's Braemar Bulk Export Project, a AUD 5 billion infrastructure corridor designed to transport magnetite concentrates from South Australia's Braemar region to offshore loading and storage facilities near Adelaide, for shipment to steel manufacturers in Asia. Mr Toll is the former Chairman of the Fortescue Metals Group.

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Posted By : Rabi Wangkhem on Mon, 15 Apr 2019
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