Montreal-headquartered Strategic Resources has signed definitive agency agreements with commodities trader Javelin Global to procure four-million tonnes of direct reduction (DR) grade iron-ore concentrate and sell up to four-million tonnes a year of DR-grade iron pellets from its planned high-purity iron pelletiser facility in Quebec.

Along with these agreements, Javelin and Strategic have signed an indicative term sheet for Javelin to provide a secured working capital facility up to $150-million to support the operations of the plant at Port Saguenay.

CEO Sean Cleary says the offtake agreements will solidify Strategy’s business plan to move ahead with the plant, which is Phase 1 of its flagship BlackRock project. The project entails a mine, concentrator and metallurgical facility.

"Javelin is an outstanding long-term partner to work with given their demonstrated track record in the seaborne iron concentrate and iron pellet markets and provides another major international sponsor for the project,” he says.

Javelin will work with Strategic, its feasibility study consultant and Metso to provide iron-ore concentrate samples from the selected feed sources for testing. The testwork will allow Metso to optimise the pellet plant and refine the detailed engineering for the project. It is estimated that the feasibility study and testing will take about six months to complete.

Strategic will continue discussions with parties globally around their interest in funding or partnering on Phase 2 of the project; the Tenova direct reduction unit at Port Saguenay. Phase 2 allows for the production of direct reduced iron or hot briquetted iron, which will ultimately help with the global transition to electric arc furnaces in the steel Industry.

Construction of the two-way, multiuser conveyor belt at Port Saguenay is well advanced and on track for completion in 2025. The 1.5-km conveyor system will serve to deliver iron-ore concentrate, and other materials from the wharf to the industrial park at Port Saguenay. The finished pellets will be transported on the same conveyor system to the wharf for export. The conveyor project, which is being funded by the federal government and province of Québec is expected to cost about C$110-million.