Joint venture participants Cazaly Resources and Vector Resources have signed a $71 million farm-in agreement that will see global mining house Anglo American take up to a 75 per cent stake in the Earaheedy iron ore project near Wiluna.
Under the agreement, Anglo American will initially take a 51 per cent interest in the project in return for a $1 million cash payment and project investment of $20 million over four years, after completing at least 7,500 metres of exploration drilling at Earaheedy.
Anglo American would be able to up its stake to 75 per cent on the completion of a bankable feasibility study (BFS) and a further cash payment of $5 million.
Also, following delivery of a positive BFS, Anglo will pay a further $45 million “success payment” to the Earaheedy joint venture.
Cazaly Resources managing director Clive Jones said the agreement recognised the “substantial” potential of the Earaheedy project.
“Earaheedy is a potentially major iron ore province and it needs the resources and expertise of a major player to develop it,” Mr Jones said in a statement.
“Anglo American has the resources to invest in the development of this project, and we, and our JV partner, are very happy to have their support.”
Cazaly and Vector will retain the full rights to the southern portion of the Earaheedy project area.
At 10:16AM (WST) Vector’s stock was up half a cent, to 12.5 cents, while Cazaly shares were down a cent, to 28 cents.
Meanwhile, Cazaly also announced today that it had extended the due diligence and exclusivity period for an unnamed investment group to evaluate the Parker Range iron ore project, by 45 days.
"Both parties are satisfied that significant and positive progress has been made on due diligence and progressing the financing plan for the Parker Range project, noting that the investment group requires clarificatuion of the time frame to define port access," Cazaly said in a statement.
