PERTH (miningweekly.com) – ASX-listed Cazaly Resources has agreed to divest of its Parker Range iron-ore project, in Western Australia, for A$13-million plus royalties.
The agreement with privately held diversified company Gold Valley Iron allows for an initial three-month due diligence and exclusivity period, with Cazaly receiving an additional A$50 000 exclusivity fee and Gold Valley Iron subscribing for 10-million shares in the company at a price of 3c each.
On the signing of a formal agreement, Gold Valley Iron will be liable for an initial A$5-million payment, and a further A$8-million payment on the start of production. Gold Valley is also liable for a A$500 000-a-year payment, or pro-rata thereof, as a holding cost prior to the start of production for a maximum of up to A$8-million, with any holding payment to be deducted from the second production payment.
A royalty ranging from 50c/t to A$1/t would also be payable to Cazaly on all the ore produced from the project, depending on the pricing of the Platts iron-ore 58 index.
The transaction would be subject to shareholder approval.
The Parker Range project hosts the Mount Caudan deposit, which is currently estimated to host a resource of some 35.1-million tonnes, at 55.9% iron.