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Anax Metals has reached a non-binding agreement with diversified producer Anglo American to fund the development of the Whim Creek Project in Western Australia.

Located 115km south-west of Port Hedland, West Pilbara, the project hosts significant polymetallic (volcanogenic massive sulphide) resources.

Anax Metals holds an 80% stake in the Whim Creek Project, which comprises four existing deposits, namely Mons Cupri, Whim Creek, Salt Creek and Evelyn.

Under the non-binding term sheet, Anglo American subsidiary Anglo American Marketing will acquire a 1% net smelter return for $2m for future copper and zinc production from the project.

In a press statement, Anax Metals said: “The proposed payment would provide Anax with further capital for early-stage development activities, exploration and capacity to assess further opportunities under the Anax strategy.”

The term sheet also provides a funding package of up to $20m for the project with an initial term of three years.

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The financing is planned to be used by Anax Metals for activities required to develop the Whim Creek mine and associated infrastructure.

The development will include the installation of new ore sorting and gravity separation circuits, the refurbishment of existing site infrastructure, and heap leach equipment.

Anax said: “Anax has previously outlined a clear strategy to acquire, develop and monetise assets that are amenable to the integration of smart sorting and associated technology.

“Anax is systematically delivering on the strategy and the proposed Anglo American royalty, project funding and offtake transaction are intended to be a key step in this process.”

Anax and Anglo American will work towards signing formal binding documentation, which is expected to complete in the coming weeks.