Alien Metals Ltd (LON:UFO), a global minerals exploration and development company, has announced it has renegotiated its agreement (see announcement 5 September 2022), with Mallina Exploration Pty Ltd, to fast track the acquisition of the E 47/3752 tenement that adjoins its flagship Hancock Iron Ore Project and provides direct strategic access to the Great Northern Highway.
Highlights
· The Company will acquire Mallina Exploration Pty Ltd.
· The key terms of the agreement remain largely unchanged from that of the original agreement; however, the Company has negotiated the removal of the condition precedent relating to exploration drilling to earn the tenement interest.
· Removal of this condition precedent allows the Company to focus on sterilisation drilling across the Miscellaneous Licence (E 47/3752) to enable access road construction.
Rod McIllree, Executive Director, commented:
“I am pleased to announce that we have successfully brought forward and concluded the acquisition of the Mallina tenement consolidating our tenement holding in and around Hancock. Fast tracking this provides us with a strategic advantage in progressing our project timeline and additionally provides further exploration upside, allowing us to expand the footprint of known targets.”
About the Hancock Project
Figure 1: Location of Hancock Iron Ore Project, Western Australia
Figure 2: Planned haul road through the Mallina acquired tenement.
Key Terms of the Acquisition
In substance, the terms of the acquisition are largely in line with the initial heads of terms arrangement as previously announced on 5 September 2022.
All reference is to Australian Dollars unless otherwise stated.
1. In consideration for the payment of a non-refundable cash amount of $10,000 to Mallina within seven days of the Execution Date of the agreement, being today (Initial Payment), Mallina will deliver to Iron Ore Company of Australia Pty Ltd (“IOCA”), the Company’s wholly owned subsidiary, a duly executed company transfer form, granting those shares in Mallina to IOCA.
2. IOCA will pay a cash amount of $20,000 to Mallina within fifteen days of a Mining Licence being granted to IOCA in respect of tenement E 47/3954.
3. The transfer of the Tenement Interest is a conditional tenement grant and is on approval by DMIRS (Department of Mines, Industry Regulation & Safety).
4. Within 30 Business Days upon the definition of a Maiden Inferred JORC Compliant Resource (“Resource”) at a grade equal to or greater than 54% Iron (Fe), IOCA will pay Mallina an amount equal to $0.50 per tonne of Resource which is located on the area of the Tenement in cash or fully paid ordinary shares in the capital of Alien, at the election of IOCA. For clarity, this payment will only apply to that part of a Resource which is located on the area of the Tenement and the first time a Resource is declared so that if two resources are declared over the same orebody, the payment under the second resource (if the second resource is larger than the first) is reduced by the previous payment made. There will not be a second payment made if an Inferred Resource is later part of a Measured Resource.
5. Within 60 Business Days upon the earlier of:
a. the grant of a mining lease within the boundaries of the Tenement; or
b. a decision to carry out extractive commercial mining on an area within the Tenement, IOCA will pay Mallina $0.50 per tonne of Resource in cash or fully paid ordinary shares in the capital of Alien, at the election of IOCA; and
c. With effect on and from the date that IOCA earns its Tenement Interest, IOCA grant Mallina a 2% gross revenue royalty on any iron ore produced from the Tenement by IOCA
.
Figure 3: Tenements surrounding Alien’s Hancock Project
The planned construction of a haul road on this western tenement will allow the transport of material from the Hancock project to Port Headland, giving the Company complete control over the project’s production. The haul road could also be continued through the main Hancock tenement to allow its use by neighbouring stranded tenements, providing Alien Metals with the strategic opportunity to charge transit fees. This would provide the Company with an additional income stream to that of the Hancock material itself, further improving the project’s already excellent economics.
