Brockman Mining Limited has provided an update on the current status of the Marillana Iron Ore Project in conjunction with the Farm-In and Joint-Venture agreement (FJV Agreement) with Polaris Metals Pty Ltd., a wholly-owned subsidiary of Mineral Resources Limited (MRL). The Marillana Project is located in the Hamersley Iron Province within the Pilbara region of Western Australia.
According to Brockman, Polaris has completed a drilling and metallurgical testing campaign and has also completed its technical and cost report on the project.
The outcome of both these undertakings has resulted in Polaris providing the company with an Indicative Development Proposal, which includes:
- A more optimised mine plan and improved yield on the ore processing for production of low impurities 60.5 per cent iron (Fe) product over more than 25 years mine life;
- A proposed logistics system to transport the ore from the mine to the port stockyard at Port Hedland. This logistics system is to be constructed and operated by MRL (or a subsidiary) for the Marillana Project.
- Construction of a berth at a dedicated location in Port Hedland subject to the approval from the Western Australian Government; and
- A current market-based estimate for project capital and operating costs, including the logistics services cost for transporting the ore from mine to ship.
The company has in principle accepted the Indicative Development Proposal pending the formal submission of a Final Investment Decision (FID) proposal from MRL. MRL intends to submit the FID proposal once it has received commitment from the State Government for the intended berth allocation.
With the Indicative Development Proposal agreed in principle, both Brockman Iron and Polaris have agreed to proceed with the following:
- Upon the receipt of FID submitted by Polaris, the company will independently review and decide on the FID for the Marillana Project;
- If both Brockman Iron and Polaris make a positive FID and a port agreement is in place: a) the Farm-in Obligations will be deemed to have been satisfied, b) the Joint Venture will be established, and c) the FJV Agreement parties will make amendments to the FJV Agreement to reflect the final agreed transportation arrangements from the mine to the port and the removal of the requirement for MRL to construct a bulk ore rail system and to have commenced construction and operation of the rail system by certain sunset dates;
- Following the establishment of the Joint Venture, MRL (or its related party) agrees to provide the Joint Venturers with funding by way of a project loan sufficient to allow the Joint Venturers to fund the forecast project capital costs;
- Under the FJV Agreement, the sunset date for commencing construction of the proposed transportation and port systems is extended to 31 December 2021 and the sunset date for commencing operations is extended to 31 December 2023; and
- Under the current Mine to Ship Services Agreement, the date for satisfaction of the various conditions precedent has also been extended until 31 December 2021.
Brockman is expected to make another announcement once the FID is made, which is anticipated to be around mid-2021.