PERTH (miningweekly.com) – ASX-listed Magnetite Mines has announced the signing of a sale and purchase letter of intent (LOI) between the South Australian Magnetite Consortium and a non-Chinese steelmaker for the purchase of one-million tonnes a year of iron-ore concentrate for pelletising purposes.
The South Australian Magnetite Consortium comprises Magnetite Mines and Lodestone Equities, which through its subsidiaries FE Mines and Olary Magnetite, holds rights to prospective tenements in South Australia.
The consortium's assets include the Mawson iron-ore project, which contains the Ironback Hill prospect, and is estimated to host more than one-billion tonnes of resource.
Magnetite Mines said on Monday that, while the LOI is nonbinding, it was the prologue to the negotiation of an offtake contract, which would become legally binding as part of the security package for financing the construction of the first production operation.
“This LOI creates a relationship of global significance in the pellet fines sector of the iron-ore supply chain and should provide entry to other steel companies who have pellet plants and who wish to partner with the consortium,” said Magnetite Mines chairperson Gordon Toll.
He noted that discussions were continuing with steelmakers in China, Japan, Korea, the Middle East and North Africa, with an additional 5 t sample of ore having been produced for metallurgical testing.