PERTH (miningweekly.com) – ASX-listed Grange Resources has struck a deal to re-acquire full ownership of its Southdown magnetite project, in Western Australia.

The company has signed a binding agreement with joint venture partner SRT Australia to re-acquire its 30% interest in the Southdown project in exchange for an unspecified cash amount and the right to future offtake and the cancellation of future royalty obligations.

The offtake rights agreement spans a period of 20 years from when the project reaches practical completion, with SRT having the option to extend for a further two periods of ten years each.

The initial offtake agreement will run for a period of three years with the subsequent offtake agreements running for a period of five years.

Grange told shareholders on Monday that the Southdown project remained a world-class asset with the ability to contribute less carbon dioxide intensive steel manufacturing industry. The company’s current intention is to develop the project.

“Grange’s re-acquisition of SRT’s interest in the Southdown project is the beginning of a new chapter for the project as well as for Grange. Southdown is a world-class magnetite deposit with the potential to deliver high-grade concentrate with low impurities, which would make the product suitable for direct reduction (DR) grade iron-ore pellets,” said Grange CEO Honglin Zhao.

“These attributes and specifications are expected to be in strong demand as the product can greatly contribute to the reduction of carbon emissions in the steel manufacturing process and provide an important ingredient in the production of green steel.

“Grange is currently undertaking a definitive feasibility study which is scheduled for completion at the end of quarter one, 2023. We look forward to realising the value of the project for the benefit of all stakeholders involved, including our shareholders, employees and community at large in the Albany, Western Australia region.”

Southdown has more than 1.2-billion tonnes of mineral resource, including a 388-million-tonne resource. A 2022 prefeasibility study looked at a five-million-tonne-a-year concentrate production with a mine life of 28 years, and potentially more than 50 years for the total of the resource.

A definitive feasibility study is progressing designs for optimising site layout, metallurgical test work and pilot plant trials using dry grinding techniques and port marine operations as well as transhipping methodology.