PERTH (miningweekly.com) – Iron-ore miner Brockman Mining has moved to increase its holdings in the Pilbara by purchasing fellow listed Sheffield Resources' south Pilbara tenements, in Western Australia.
Brockman said on Tuesday that it had entered into a binding agreement with Sheffield to purchase two exploration licences and a priority licence adjacent to its Ophthalmia iron-ore project.
The Sheffield tenements have an exploration target of between 20-million and 60-million tons, grading between 56% and 60% iron. The Ophthalmia project has a resource of some 269-million tons, grading 59.1% iron.
“The consolidation of these tenements further cements Brockman’s presence in the region, and is a logical step in the development of Ophthalmia.
“As well as the possibility of identifying additional mineral resources, the increased project footprint provides greater flexibility in the location of processing and transportation infrastructure,” said Brockman Australia CEO Russell Tipper.
Under the terms of the transaction, Brockman would provide A$1-million in cash upfront, as well as a supplementary payment of 10 c/t for all Joint Ore Reserves Committee-compliant resources defined at the tenements.
The miner would further pay a royalty of 1% free-on-board for all iron-ore produced from the tenements.
In addition, a price participation royalty of 5% would also be applicable for all revenues over A$120/t for iron-ore sales from the tenement.
Sheffield MD Bruce McQuitty said on Tuesday that the company recognised the need to consolidate resources to achieve infrastructure solutions in the south Pilbara and added that Brockman was well placed to do this.
The company still has four granted exploration licences situated in the north Pilbara region, and all were located near existing iron-ore mine sites and major development projects, and were within potential trucking distance of Port Hedland.
“While we believe that our iron projects carry significant value, our current priorities are the Dampier mineral sands and Red Bull nickel projects,” McQuitty said.