TerraCom’s wholly owned subsidiary has signed an exclusive non-binding memorandum of understanding (MoU) to acquire the Kalia iron-ore project in the Republic of Guinea.

The MoU was signed with Bellzone Holding, reported Business-news-today.com.

Located in Faranah Prefecture, the Kalia project is anticipated to hold 4.7 billion tonnes of magnetite banded iron formation.

TerraCom expects the acquisition to contribute to its business diversification strategy to become a producer of global bulk commodities.

TerraCom executive chairman Craig Ransley said: “Whilst we are in the early days of the due diligence process, the company is excited to be working towards an acquisition within one of the world’s leading countries, in terms of iron ore and bauxite resources available for exploitation.

“This opportunity further cements the company’s business diversification strategy to become a global bulk commodities producer.”

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TerraCom plans to initially focus on restarting production from the project as expediently as possible. It intends to target domestic iron ore users.

The firm also claimed that the project’s proximity to the Konta Port provides the Kalia project with the flexibility to consider both road and rail options for exports.

The MoU is subject to customary conditions precedents that include due diligence, regulatory approvals, among others.

The project comprises a 20km-long magnetite strike, and 900Mt of oxide and supergene banded iron formation targeting ferronickel.

In May 2021, Hummingbird Resources secured mining licences for its Kouroussa Gold Project from the Government of Guinea.

The licences included a 15-year renewable licence term, a 1% contribution to a local development fund, a 5% royalty payable to the federal government, and a 30% tax on profits.