Macarthur nabs further $250K from WA iron ore rights sale

Macarthur Minerals has received the second of three $250,000 payments from the sale to Gold Valley Yilgarn for the rights to mine and develop its Lake Giles Ularring iron ore project in WA’s Yilgarn region.

The deal involves a further payment of $250,000 by December and a royalty for every tonne of ore extracted that could potentially generate a hefty $89 million for the company.

Macarthur Minerals is cashed-up after selling the mining rights to its Ularring iron ore play and can now focus on its Moonshine magnetite project.

The royalty deal will net Macarthur $10 million dollars for the first 2 million tonnes of ore Gold Valley ships to the Esperance port from the 80.5 million-tonne project and $1 for every subsequent tonne.

As part of the life-of-mine agreement, Gold Valley will be required to maintain the tenements in good standing, pay all State Government royalties and secure all necessary approvals required before it begins mining.

‘Receiving this second payment from Gold Valley is a testament to our partnership and commitment to advancing our valuable iron ore assets.’

Macarthur Minerals chairman Cameron McCall

While Macarthur will retain ownership of the Ularring project tenements, selling the mining rights will give it the financial firepower to focus on developing its 1.3 billion-tonne Lake Giles Moonshine magnetite project that sits next door.

Management says it is considering the prospect of bringing in a partner to help develop the mammoth magnetite deposit it currently has 100 per cent ownership of.

Macarthur Minerals chairman Cameron McCall said: “Receiving this second payment from Gold Valley is a testament to our partnership and commitment to advancing our valuable iron ore assets in Western Australia. This milestone is not only a significant step towards production but also strengthens our financial position as we work towards bringing our much larger, 1.3 billion tonne Moonshine Magnetite Iron Project to market.”

Gold Valley intends to develop the Ularring project to blend product with the crushed ore from its high-grade, 130 million-tonne Wiluna West mine it bought from GWR Group last year.

The “unique blend” of about 58 per cent hematite iron ore, which is expected to attract healthy premiums from select steel manufacturers, will be trucked to Kalgoorlie before being railed to the port on trains operated by Australia’s biggest rail freight operator, Aurizon.

In a shock development two months ago that will aid Gold Valley’s plans to boost its iron ore exports, Mineral Resources revealed that it would cease shipping ore from its Koolyanobbing hub in the Yandal district after six and a half years, potentially opening-up 8 million tonnes of annual capacity through the Port of Esperance.

Gold Valley plans to ship up to 3 million tonnes of iron ore a year. About 1.5 million tonnes of product is expected to pass through Esperance following a scheduled ramp-up in production.

Gold Valley is a West Perth-based miner privately-owned by Chinese-born businessman Yuzheng Xie and has been making itself known in the WA iron ore sector recently, locking in two iron ore projects in the past year.

The company, which also has interests in the agriculture and energy sectors, currently ships ore to seven countries, including several in Europe, and is recognised internationally as a green iron ore producer.

Macarthur will be looking for Gold Valley to mine every possible tonne of iron ore from Ularring, to generate the type of cash-flow from royalties that will put the company in the box seat to ratchet up development plans for its Moonshine play.

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