BCI Minerals has reached an agreement to divest its Kumina iron ore project, located in the West Pilbara region in Western Australia (WA) to mining services provider Mineral Resources as part of its previously announced iron ore asset divestment process.
The company noted that it is continuing its ongoing negotiations with prospective buyers for the sale of other assets, including Iron Valley, Maitland River magnetite project, Bungaroo South tenements and the Cape Preston East (CPE) port rights. The sale of Kumina project is valued at A$35m ($24.7m).
Under the terms of the agreement, Mineral Resources will pay A$27m ($19.1m) once the deal is closed, followed by A$4m ($2.82m) upon the first export of iron ore from the project and a further A$4m ($2.82m) 12 months after the first export.
BCI Minerals managing director Alwyn Vorster said: “Proceeds from the Kumina sale will be sufficient to fast-track the development of BCI’s 100% owned Mardie Salt & Potash Project during 2019, including finalising a Definitive Feasibility Study (DFS), establishing test evaporation ponds and completing construction of project support infrastructure.”
The Kumina project is estimated to have a JORC inferred mineral resource of 78.3 million tonnes at 59.1% Fe. BCI acquired the project tenements for less than $A9m ($6.36m) last year.
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Mineral Resources managing director Chris Ellison said: “The Kumina project transaction builds on our successful relationship with BCI, our partner in the Iron Valley iron ore project.
“The location of the Kumina Project will enable the company to leverage its existing workforce and logistics supply chain in the Pilbara, with the ore to be exported out of Port Hedland.”
Subject to fulfilment of conditions, including tenement ownership and third-party consents and assignments, the closure of the transaction is expected to take place by the end of this year.