Mineral Resources (ASX: MIN) has executed a binding heads of agreement with Cazaly Iron Pty Ltd (a wholly owned subsidiary of Cazaly Resources Limited (ASX: CAZ) for MRL to purchase the assets that comprise the Parker Range Project in the Yilgarn region of Western Australia.
The assets include the tenements that comprise the Parker Range Project (M77/0741, M77/0742, M77/0764, L77/0220, L77/0228 and L77/0229), the mining information, contracts and authorisations for the Parker Range Project. The key terms of the agreement are as follows:
· The heads of agreement is conditional on MRL completing due diligence within 21 days, board approval of both parties, ministerial consent for the transfer of the tenements and Cazaly shareholder approval as, and if, required.
· On completion, the purchase price payable by MRL to Cazaly Iron Pty Ltd for the assets is A$20 million (exclusive of GST).
· MRL will also pay Cazaly Iron Pty Ltd a royalty of A$0.50 for every dry metric tonne of iron ore extracted and removed from the area of the tenements payable after the first 10 million dry metric tonnes of iron ore have been extracted and removed from the area of the tenements.
· The parties will use reasonable endeavours to enter a more comprehensive sale and purchase agreement and royalty agreement within 30 days, however, in the absence of the parties entering more comprehensive agreements, the heads of agreement remains binding on the parties.
Information regarding Parker Range
The Parker Range Project is located 52 kilometres south of Southern Cross, 15 kilometres south-east of Marvel Loch and approximately 400 kilometres east of Perth in the Yilgarn region of south-western Western Australia.
As set out in Cazaly’s ASX announcement on 26 March 2019, the Parker Range project has a Proven and Probable Ore Reserve of 31.4Mt targeting an iron ore fines product grading 56.4% Fe (61.9% calcined Fe) and 0.02% P, 6.0% SiO2 and 2.50% Al2O3.