Macarthur Minerals Signs 10 Year Iron Ore Off-Take Agreement for the Lake Giles Iron Project in Australia With Glencore International A.G.
VANCOUVER, March 21, 2019 - Macarthur Minerals Ltd. (TSX-V: MMS) (OTCQB: MMSDF) (the “Company” or “Macarthur”) is pleased to announce that it has entered into a binding Life-of-Mine Off-Take Agreement (“Agreement”) with Glencore International A.G. (“Glencore”) for sale of iron ore to be produced from the Lake Giles Iron Project (“Project”) at Lake Giles in the Yilgarn region of Western Australia from the commencement of commercial production.
Cameron McCall, Executive Chairman of Macarthur Minerals commented;
“I am extremely excited to see Glencore’s commitment to purchase Macarthur’s production over the long term. Securing this approximately US$4 billion purchase arrangement ensures consistent long-term revenue to the Company. Seeing a commitment of this size validates our resource and project and puts Macarthur in a position to maximize value to our shareholders. Macarthur’s management is pursuing debt financing discussion with European banks and international financial institutions. Achieving this key milestone is the beginning for Macarthur to transition into a large scale global resource production company. A project of this size will provide long term Western Australian job creation for a generation, especially in the local region of the proposed iron ore mines and for the port workforce in Esperance.”
Transaction Highlights:
- Glencore secures life-of-mine of the project with commercial terms for approximately 4 million tonnes per annum average for the first 10 years, with the option to extend for a following 10 years for all tonnes of future Lake Giles iron ore production.
- Glencore agrees to release up to 70% of their off-take volume where Macarthur secures project financing from a Strategic Industry Investor, subject to their securing off-take of the product produced.
- This Agreement with Glencore positions Macarthur to go forward to complete their project financing.
- The Agreement is currently valued at approximately US$4 billion in revenue over the first 10-year term ensuring Macarthur long term revenue and consistent sales per year.
- Terms and conditions have been competitively negotiated reflecting strong forward demand.
High grade iron ore prices:
Metallurgical test work on the Lake Giles’s Moonshine Magnetite Project indicates that an export product of high margin +65% Fe can be achieved. Current market price for 65% Fe product is quoted at US$98/tonne (A$140 per tonne).1 The value of the initial 10-year Glencore off-take at current market price for Moonshine iron ore would be ~US$4 billion.
About the Lake Giles Iron Project:
On December 13, 2018, Macarthur announced that its Lake Giles Iron Project is a significant Australian iron ore project adjacent to highly developed infrastructure suitable for iron ore exports. There is considerable spare port and rail capacity that can be utilized by the Project, with the Port of Esperance having total iron ore export capacity of 11.5 million tonnes. The Capex for a combined Moonshine Magnetite and Ularring Hematite operation is now estimated to be US$335 million. Magnetite Opex costs are estimated to be A$55/tonne free on board (“FOB”) and Opex costs of A$42/tonne FOB for hematite.
Macarthur owns 100% of the Moonshine Magnetite Project, with an Inferred and Indicated Mineral Resource Estimate consisting of 1,316 million tonnes (Mt) @ 30.1% Iron (Fe). Initial metallurgical test work from core at Moonshine indicated that a very high-grade iron ore product ranging from 68.5%-69.1% Fe, can be achieved as an export quality target.
The Inferred Mineral Resource estimate for the Moonshine Magnetite Project was initially prepared by CSA Global Pty Ltd (NI43-101 Technical Report filed December 17, 2009, titled “NI43-101 Technical Report on Lake Giles Iron Ore Project: Western Australia”) and was updated by Snowden Mining Industry Consultants (NI43-101 Technical Report filed March 25, 2011, titled “Macarthur Minerals Ltd.: Moonshine and Moonshine North Prospects, Lake Giles Iron Project, Western Australia, NI43-101 Technical Report – Preliminary Assessment”).
Macarthur also owns the Ularring Hematite Project, with a Mineral Resource Estimate consisting of Indicated 54.46 Mt @ 47.2% Fe and Inferred 25.99Mt @ 45.4% Fe, previously announced on August 16, 2012 (NI 43-101 Technical Report filed October 1, 2012, titled “NI 43-101 Report, Macarthur Minerals Ltd., Pre-Feasibility Study, Ularring Hematite Project, Western Australia”). The Pre-feasibility Study focused on utilising all Probable Mineral Reserve of 42.95Mt @ 47% Fe hematite, producing a 60.1% Fe sinter fines product.
ABOUT GLENCORE INTERNATIONAL A.G.
Glencore is one of the world’s largest globally diversified natural resource companies and a major producer and marketer of commodities comprise around 150 mining and metallurgical sites, oil production assets and agricultural facilities.
Glencore industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries employing around 158,000 people, including contractors.
Glencore has a strong footprint in Australia, operating for nearly 20 years and hold significant interest across all mainland states and the Northern Territory.
ABOUT MACARTHUR MINERALS LIMITED (TSX-V: MMS) (OTCQB: MMSDF)
Macarthur Minerals Ltd. is an iron ore development, gold and lithium exploration company that is focused on bringing to production its Western Australia iron ore projects. The iron ore projects are Ularring hematite (approved for development) and the one plus billion tonne Moonshine magnetite. Macarthur Minerals has prominent (~1,130 square kilometer tenement area) gold, lithium, nickel, cobalt exploration interests in Pilbara region of Western Australia. In addition, Macarthur Minerals has lithium brine Claims in the emerging Railroad Valley region in Nevada, USA.
On behalf of the Board of Directors,
MACARTHUR MINERALS LIMITED
“Cameron McCall”
Cameron McCall, Executive Chairman
Company Contact
Joe Phillips, CEO and Director
Email: jphillips@macarthurminerals.com
Telephone: +61 448899247
Website: www.macarthurminerals.com
For further information please contact:
Investor Cubed Inc.:
Neil Simon
E-mail: nsimon@investor3.ca
Telephone: (647) 258-3310
Fax: (416) 363-7977
THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Caution Regarding Forward Looking Statements
Certain of the statements made and information contained in this press release may constitute forward-looking information and forward-looking statements (collectively, “forward-looking statements”) within the meaning of applicable securities laws. The forward-looking statements in this press release reflect the current expectations, assumptions or beliefs of the Company based upon information currently available to the Company. With respect to forward-looking statements contained in this press release, assumptions have been made regarding, among other things, the timely receipt of required approvals, the reliability of information, including historical mineral resource or mineral reserve estimates, prepared and/or published by third parties that are referenced in this press release or was otherwise relied upon by the Company in preparing this press release. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct as actual results or developments may differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include fluctuations in exchange rates and certain commodity prices, uncertainties related to mineral title in the project, unforeseen technology changes that results in a reduction in iron ore demand or substitution by other metals or materials, the discovery of new large low cost deposits of iron ore, uncertainty in successfully returning the project into full operation, and the general level of global economic activity. Readers are cautioned not to place undue reliance on forward-looking statements due to the inherent uncertainty thereof. Such statements relate to future events and expectations and, as such, involve known and unknown risks and uncertainties. The forward-looking statements contained in this press release are made as of the date of this press release and except as may otherwise be required pursuant to applicable laws, the Company does not assume any obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
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1 Custeel Iron Ore Price Index