PERTH (miningweekly.com) - Iron-ore major Fortescue Metals on Monday abandoned development activities into fellow-listed Iron Ore Holdings’ (IOH’s) Iron Valley deposit, as part of its expanded Nyidinghu development.
In February last year, Fortescue signed a 13-month exclusive option over the Iron Valley tenements, in central Pilbara, with the miner agreeing to pay A$25-million in cash for an option until the end of March, to obtain a licence to mine the Iron Valley.
IOH told shareholders on Monday that the joint decision to terminate the agreement was primarily based on the current development focus of each company, following the recent market volatility and an agreement that Iron Valley and Nyidinghu would not be developed as an integrated mine in the timeframe contemplated in the original transaction.
Under the terms of the deed of release, IOH would now repay Fortescue A$4-million in consideration for the early termination of the option period.
IOH said the agreement allowed the company to consider alternative development options for Iron Valley and its Maitland River projects.
Fortescue, in turn, told shareholders that the Nyidinghu project remained an important part of its portfolio of expansion projects and options, and added that further development of the project would be based on customer requirements and market conditions.
The Iron Valley project is contiguous to Fortescue’s Nyidinghu deposit, with the iron-ore resource at Nyidinghu extending into Iron Valley. The project has a Joint Ore Reserves Committee-compliant resource of some 260-million tons, of which more than 80% has been classified as indicated.