PERTH (miningweekly.com) – ASX-listed companies BC Iron and Cleveland Mining have pushed forward with their intent to acquire an interest in three iron-ore projects, in Brazil.
The miners in May signed a memorandum of understanding (MoU) to acquire a shareholding of up to 80% over three separate projects in Brazil.
On Thursday, BC Iron and Cleveland converted the MoU into a binding option agreement, allowing the alliance to proceed with the acquisition through earn-in agreements based on staged payments and key project milestones.
The transaction did not require any upfront payments prior to drilling.
In the first phase of the earn-in, the alliance would sole-fund exploration activities, with no minimum spend set. If the results from the first phase were promising, BC Iron and Cleveland could elect to acquire a 10% interest in each project by making a $2-million payment to the project owner Bahmex.
Following Phase 1, there would be two additional phases where the alliance could choose to sole-fund further exploration and evaluation activities and to make option payments based on these.
If both additional phases were completed, the alliance’s interest in the projects would increase to 80%.
“Greenfield exploration projects are an important component of a balanced project pipeline and complement BC Iron’s interest in the Nullagine joint venture operation and the Pilbara, which remains our key focus for growth opportunities,” BC Iron MD Morgan Ball said.
He noted that the earn-in structure allowed the alliance partners to assess the prospectivity of the Brazilian tenure in a staged manner, with low initial expenditure and optionality.