Havilah – SIMEC Exclusivity Extended On Iron Ore Projects

  • Mar 28, 2019 AEDT
  • Team Kalkine
Havilah – SIMEC Exclusivity Extended On Iron Ore Projects

Iron ore prices are trading flat, with Iron ore Fines 62% Fe (CME) trading in the range of $85.41 (close on 19th March 2019) to $85.89 (closing on 21st March 2019). The prices are currently hovering around $85.72.

Mixed fundamentals of supply and dmand coupled with diverse events in the global economy are keeping the prices at bay. China’s increased stance on pollution is marking suspension on few Chinese mill activities such as sintering, which in turn, is exerting pressure on iron ore prices.

On the other hand, high steel prices in China is providing a cushion to iron ore prices as few mills are procuring iron ore to take advantage of high steel prices in the domestic market.

On supply and demand dynamics, a recent cyclone named Veronica passed through the Pilbara region, which led port authorities to halt cargo loading across Port Hedland in Pilbara. The halt in cargo loading across the port led to a delay in delivery of iron ore from the companies such as Rio Tinto and BHP operating in the region, which in turn, slightly supported iron ore prices. However, the world’s top iron ore producer Vale came back in the market, after authorities in Brazil permitted the giant for resuming its Brucutu Mine, which in turn exerted pressure on iron ore prices.

Iron ore prices and the future outlook are keeping the iron ore miners motivated to acquire more projects and take advantage of high iron ore prices that could emerge in the future. One such Iron ore miner, SIMEC sought an extension to complete its due diligence on Havilah’s Maldorky and Grants Iron ore projects.

Havilah Resources Limited (ASX: HAV), a multi-metal miner announced on 28th March 2019 that the company agreed to extend the exclusivity period for SIMEC Mining from 31st March 2019 to 30th April 2019. The company extended the deadline so that SIMEC could secure additional time, which is required by the company to reach a preliminary conclusion to continue negotiations on the terms of a deal structure and commercial agreement.

Havilah also mentioned that SIMEC would pay no payment for the second exclusivity extension as active negotiations are taking place and a possible agreement could be reached by no later than the extended deadline. SIMEC paid Havilah $1.0 million for the previous exclusivity extension till 31st March 2019, and as per the company, it will be deducted from any amount payable by SIMEC Mining to the company under any transaction that may be concluded between the two parties, within the calendar year 2019.

Iron ore is currently in the face of balanced scenario in terms of both demand and supply and global events; thus, prices are moving in a narrow range.

Iron ore miners remained in the positive territory on the Australia Stock Exchange, with Fortescue Metals Limited (ASX: FMG) gaining 1.77% as compared to its previous close to mark a close of A$6.900.

Other miners such as Rio Tinto and BHP followed the same trajectory and ended the day’s session on a positive note.

Rio Tinto Limited (ASX: RIO) gained 1.24% as compared to its previous close to mark a close of A$96.410; likewise, BHP Billiton (ASX: BHP) rose 0.90% as compared to its previous close to end the day’S session at A$38.240.

All the above three mentioned iron ore miners ended the day’s session at their respective day’s high.


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