PERTH (miningweekly.com) – Junior Tulla Resources on Friday announced a heads of agreement (HoA) with Australia’s Koch Metals over a potential iron-ore offtake agreement at the Norseman project, in Western Australia.
Tulla Resources subsidiary Central Norseman Gold Corporation and Pangolin Resources own all of the iron-ore rights at the Norseman project.
Under the terms of a proposed offtake agreement, Koch would purchase up to 400-million tonnes of iron-ore, with an initial commitment to purchase 200-million tonnes, and then a further 50-million tonnes, with an option thereafter to purchase the life-of-mine iron-ore production.
Koch will provide an initial A$42-million to fund the exploration, development and mining of the iron-ore at Norseman over an initial three-year period, and thereafter will fund 65% of all iron-ore project costs.
Tulla told shareholders on Friday that the offtake arrangement and funding was conditional on a definitive agreement, Koch undertaking a capital raise, being admitted onto the London Stock Exchange, and completing a due diligence in relation to the iron-ore assets, as well as all the necessary approvals being obtained.
Tulla and its Norseman joint venture partner Pantoro in December struck an agreement with ASX-listed Mineral Resources to hunt for lithium on the gold project tenements.
Mineral Resources would complete a minimum A$500 000 spend within the first six months of the lithium partnership, and would spend a further A$2.5-million within 18 months thereafter.
Mineral Resources will also be expected to complete a feasibility study, including the definition of a Joint Ore Reserves Committee-compliant resource within a 24-month period, to earn a 25% interest in the lithium rights within the Norseman gold project.
Mineral Resources could earn a further 40% interest in the lithium rights by sole-finding the project until first production.