ASX-listed Cyclone Metals has announced a memorandum of understanding (MoU) with diversified major Vale regarding the development of an iron-ore project in Canada.
The MoU outlines the terms for a strategic partnership aimed at advancing the Iron Bear project, near Schefferville, to a decision to mine.
“Vale is a powerhouse for the production of ultra clean iron-ore products which includes DR pellets and their proprietary cold briquettes. They are an ideal partner for us, and we look forward t leveraging Vale’s extensive operational and financial resources to realise the full potential of Iron Bear,” said Cyclone CEO Paul Berend.
In a two-phased investment, Vale could earn a controlling interest in Iron Bear. The first phase will require an $18-million investment, followed by a second phase, entailing a joint venture and initial 30% interest.
Vale’s ownership in the Iron Bear JV can increase to 75% when a decision to mine is taken, or the Brazil major’s total contribution reaches $120-million.
Thereafter, Vale will have the right to acquire Cyclone’s remaining shareholding at a fair market value.
Iron Bear has a mineral resource of 16.6-billion tonnes containing 29.3% total iron and 18.2% magnetic iron, cut-off grade 12.5% magnetic iron. Champion Iron, IOC, ArcelorMittal and Tata Steel are major producers in the region.
Edited by: Creamer Media Reporter
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