THE BOURSE WHISPERER: Emerging South Australia-focused iron ore producer, IronClad Mining has reached a further off-take agreement for its Wilcherry Hill project on the Eyre Peninsula.
The new four-year off-take agreement is with Hong Kong-based resources industry investment group, New Page Investments Limited.
The same company recently took up a $6 million share placement in IronClad.
New Page Investments is the major shareholder in China-based global steel trading, distribution, processing and manufacturing company, Novo Group, which is dual-listed on the Hong Kong and Singapore stock exchanges.
The company already has a number of other investments throughout the Australian iron ore industry.
The new off-take agreement is for up to 50 per cent of annual iron ore production from the Wilcherry Hill mine that IronClad operates in an 80:20 Joint Venture with Trafford Resources.
Wilcherry Hill location map. Source: Company
The agreement secures all iron ore produced from the Wilcherry Hill mine for the first two years.
The deal follows a similar but separate off-take agreement IronClad signed last year with a Singaporean trading company.
The latest agreement also secures 50 per cent off-take of the ore for years three and four.
“Today’s announcement with New Page Investments not only bolsters our order book but, significantly, paves the way for heightened construction activity at the mine site,” IronClad Mining executive chairman Ian Finch said in the company’s announcement to the Australian Securities Exchange.
“Under the terms of the new agreement, New Page Investments must pay IronClad 95 per cent of the agreed value of iron ore leaving via ship from our Lucky Bay port facility, within 30 days of that ship departing.
“It is another most welcome development for IronClad and its shareholders.”
IronClad said the Wilcherry Hill mine is on track to commence maiden production in the current March quarter.
Inaugural shipments of Direct Shipping Ore for sale to Chinese steel mills are due to commence in the second quarter of the 2012 calendar year.