Alien Metals shares surged on Wednesday after the metals explorer announced an agreement with global mining giant Anglo American related to the Hancock Iron Ore Project in Western Australia.
Alien Metals, through its wholly-owned subsidiary Iron Ore Company of Australia, has signed an agreement for 100% of the offtake from the Hancock project and $15 million funding.
Alien Metals will have access to a $10 million advance payment facility and upto $5 million in vessel payments for the first 12 months.
Anglo American will receive an agreed royalty for the 24 months as part of the deal that includes conditions such as a $5 million equity raise being used for Hancock and the approval of permits and licenses.
Today’s announcement is major endorsement of the Hancock project and the development work by the Alien Metals team. Alien Metals shares traded as high as 0.80p, before falling back.
“We are really pleased to have signed this Mandate Letter with a leading, global mining company of Anglo American’s stature,” said Bill Brodie Good, CEO of Alien Metals.
“The Mandate Letter provides a pathway to negotiate and agree the potential development debt funding, and a 100% offtake solution. This Mandate Letter supports our near-term production aspirations and, unlike conventional debt finance, the potential bespoke funding with offtake provides alignment between the parties for the pursuit of scale across multiple assets with a world class counterparty.
“The Board is continuing to assess development plans at Hancock which may reduce the initial capex requirement outlined in the October 2021 Scoping Study and will advise once this process is complete.”
Alien Metals operates the Hancock Project in a diverse portfolio of global mining assets which includes Mexican Silver projects and PGM asset in Australia.