PERTH (miningweekly.com) – Resource developer BCI Minerals has struck a A$35-million deal with fellow-listed Mineral Resources (MinRes) to divest of its Kumina iron-ore project, in the Pilbara.

Under the terms of the agreement, MinRes will acquire the project for an initial A$27-million, with a further A$4-million payable on the first export of iron-ore from the Kumina project.

An additional A$4-million payment will be made to BCI Minerals 12 months after first iron-ore exports.

“A positive return on the Kumina investment has been achieved, given that the tenements were acquired for less than A$9-million in late 2017, followed by a modest initial six-month exploration programme, which resulted in a maiden Joint Ore Reserves Committee mineral resource of 115-million tonnes, at 58% iron,” BCI MD Alwyn Vorster said on Monday.

“Proceeds from the Kumina sale will be sufficient to fast-track the development of BCI’s 100%-owned Mardie salt and potash project during 2019, including finalising a definitive feasibility study, establishing test evaporation ponds and completing construction of project support infrastructure.”

MinRes MD Chris Ellison said on Monday that the company was selective in its focus on assets that fit the company’s growth plans, and was not interested in acquiring BCI’s entire iron-ore portfolio.

“However, an opportunity arose late in BCI’s divestment process for MinRes to acquire Kumina on its own, and I’m very pleased with the agreement we have announced.

“The Kumina project transaction builds on our successful relationship with BCI, our partner in the Iron Valley iron-ore project.”

Ellison said that the location of the Kumina project would enable MinRes to leverage its existing workforce and logistics supply chain in the Pilbara, with the ore to be exported from the Port of Port Hedland.

In the meantime, MinRes will retain its exclusive right to operate the Iron Valley iron-ore project, and purchase all iron-ore produced from the project.

BCI is still hunting for a buyer for its share of the MinRes-operated Iron Valley, as well as the Bungaroo South tenements and the Cape Preston East port rights, as well as its other iron-ore assets that include the Maitland River magnetite project.