Prophecy Development has signed an agreement to acquire Fairmont Resources’ Buttercup Iron-Titanium-Vanadium (Fe-Ti-V) project in Quebec, Canada.
Under the agreement, Prophecy will pay $1m to Fairmont in order to acquire the claims and a lease that constitutes the Buttercup project, with the possibility of up to half of the amount being paid in common shares.
A further $500,000 will be paid on the completion of the first anniversary of the closing date, with Prophecy having the option to pay up to half of it in shares.
Prophecy Development executive chairman John Lee said: "For the next three months, Prophecy and Fairmont will work collaboratively to identify dense aggregate off takers, arrange mining equipment, and organise land and sea transport.
"Our goal is to commence production and load the first shipment by the end of 2017."
The assets are part of the Buttercup project, and located 30km north of Saguenay, Quebec.
Lens A of the property has a historical indicated resource estimate of 2.779 million tonnes comprising 48.4% of iron, 18.9% of TiO2, and 0.67% of V2O5.
Meanwhile, Lens B has a historical indicated resource of 758,828t at 49.39% iron, 19.07% of TiO2, and 0.64% of V2O5.
In October 2014, Fairmont undertook surface channel sampling at the project, with 361m of sampling.
It is understood that 182 samples contained massive titano-magnetite, averaging more than 70% of Fe2O3, 19% of TiO2, and 0.56% of V2O5.
Prophecy indicated that it is in the initial phase of negotiations with potential dense aggregate buyers.
In the event that a commercial offtake agreement has been signed, the company expects production from the project to before the end of this year.
The latest project is the company’s fourth acquisition this year.