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On 22 January 2019, Mineral Resources Limited (ASX:MIN) reiterated its announcement on 27 July 2018 related to FJVA (Farm-in and Joint Venture Agreement), signed between Mineral Resources and Brockman Mining Limited (ASX:BCK) in the context of the Marillana iron ore project.
Mineral Resources Limited is an Australian based mining company, engaged in iron ore, manganese and lithium exploration. The companyâs subsidiaries include: Process Minerals International Pty Limited (PMI), PIHA Pty Ltd and Crushing Services International Pty Ltd.
Brockman Mining Limited is under the mining sector. The company mainly focuses on iron ore development. The company has significant iron ore projects. Some of the projects are: the Ophthalmia Project, The Marillana Project and so on.
Both the companies intended that the FJVA become unconditional. For that, both the parties were required to execute a Mine to Ship Logistics Agreement so that they can transport the Marillana iron ore product via a light-rail system from the mine site to Port Hedland. Now, both the parties have executed the agreement in such a way that the FJVA has become unconditional and the farm-in period has started.
For acquiring the 50% interest in Marillana, Mineral Resources need to spend $250,000 on exploration and development activities on the Marillana sites within six months. Within six months, the company also needs to complete the process design criteria for the processing plants, optimize its mine plan study, and finalize its mine development layout plan.
Both the parties are satisfied with the Farm-in Obligation; now after this, they will form an unincorporated 50:50 JV (Joint Venture) so that they can start the procedure to develop Marillana.
Below are the conditions in the Mine to Ship Logistics Agreement:
- The company needs to execute a state agreement with the Western Australian government.
- The company needs to procure all the leases and licenses related to the light rail system and port infrastructure within the inner harbor of Port Hedland.
- MIN will obtain project finance for funding the construction and commissioning of the rail and port infrastructure. MINâs board will make a final investment decision so that they can proceed.
Once the Mine to Ship Logistics Agreement become unconditional, then the company will construct, commission, and operate the rail, rollingstock and port infrastructure so that they can transport up to 30Mtpa of iron ore. The company will transport it from the mine site to Port Hedland, and from there they will load it on to vessels, and after that, the company will export the product.
Stock performance: The shares of Mineral Resources Ltd closed the dayâs trading session at A$15.970, down by 0.312% on 22 January 2019. The market capitalization of the company stands at circa $3.01 billion with 187.97 million outstanding shares. In the time span of the previous six months, the stock delivered the negative return of 5.76%. During the last one month, MIN delivered the positive return of 11.40%.
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