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Alien Metals Ltd on Wednesday said it signed a mandate letter with mining firm Anglo American PLC for the exclusive rights to negotiate up to $15 million in funding and a 100% offtake deal for the Hancock iron ore project in Western Australia.
Shares in Alien Metals were up 20% at 0.69 pence on Wednesday morning in London.
The mineral explorer and developer explained that the agreement was reached through its wholly-owned subsidiary, Iron Ore Company of Australia Pty Ltd.
Under the mandate letter, Anglo American will receive an agreed royalty for 24 months, 100% offtake for sinter fines and lump from the Hancock project and vessel prepayments for up to $5.0 million for the first 12 months. It also includes a $10.0 million advance payment facility.
Chief Executive Bill Brodie Good said: ‘The mandate letter provides a pathway to negotiate and agree the potential development debt funding, and a 100% offtake solution. This Mandate Letter supports our near-term production aspirations and, unlike conventional debt finance, the potential bespoke funding with offtake provides alignment between the parties for the pursuit of scale across multiple assets with a world class counterparty.’
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