Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note that
Term Sheet for Mine-Gate DSO Purchase from GWR
A binding term sheet signed between the parties paves the way for Macarthur to purchase up to 400,000 tonnes per annum of DSO lump and fines products from GWR at the mine gate for an initial period of 2 years, with the ability to extend for up to a further 2 years.
The sale price for GWR's DSO will reflect an equitable split of the realised sale price on an FOB basis at the ship rail, having regard to Macarthur's costs to transport the product, which will be disclosed on an open book basis between the parties. The term sheet is subject to the parties entering into a definitive agreement following completion of the balance of the route to market arrangements by Macarthur on a basis that is commercially acceptable to both parties.
On
The combination of these arrangements could see Macarthur undertaking transport of a GWR DSO product as early as
The characteristics of the GWR product may also enable Macarthur to create a physical or virtual DSO blend product with Ularring DSO that achieves improved pricing going forward. Macarthur's iron ore at Ularring is contracted for sale to Glencore under an existing Offtake agreement entered into in 2019.
Ularring DSO Update
Macarthur is continuing to progress planning work for its 'Snark' deposit at Ularring, with the intention of commencing commercial DSO mining operations at the earliest available opportunity. Given the current strength of the global iron ore market, the Company is targeting development of a simple DSO mining operation utilising mobile crushing and screening equipment.
Macarthur has appointed
Initial mining operations will be focused on the Ularring hematite resource, and specifically the deposits located at Snark and Drabble Downs. These deposits are located within fully granted mining leases, which have existing
The Company also recently made an application for a Miscellaneous Licence covering an area of 74 hectares in the Yilgarn region of
The opportunity to enter into a mine-gate sale with Macarthur Minerals provides an opportunity for GWR to increase its export tonnage over and above its planned tonnage without impacting upon its current operations, whilst providing Macarthur Minerals with the opportunity to kick-start its Hematite mining operations at Ularring.'
The deal has the potential to enable GWR to realise value for its product by providing additional export capacity. From Macarthur's perspective, GWR's offer to enter into a mine-gate sale arrangement can facilitate early revenue flows for Macarthur between now and commencement of commercial mining operations for DSO at Ularring whilst also providing the potential for Macarthur to create a physical or virtual DSO blend product that achieves improved pricing for its Ularring DSO following commencement of planned commercial mining operations there.
The deal with GWR provides opportunities that can benefit both companies, and Macarthur is grateful to GWR for the opportunity to partner with it. We look forward to a mutually beneficial collaboration which we hope will develop into a broader co-operation that can help realise the untapped economic potential of the Yilgarn region and deliver sustainable jobs and economic benefits for the region and for the
Cadence holds approximately 1% of the issued equity interest in Macarthur, which is an Australian mining exploration company focused primarily on iron ore, nickel, lithium and gold in
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Forward-Looking Statements
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