Offtake Agreement Iron Ore

Given the current market price for 65% Fe products quoted at $98/tonne, the value of glencore`s initial 10-year purchase for Moonshine iron ore would be approximately $4 billion. The agreement with Tennant Metals represents BC Iron`s first third-party removal agreement and marks an important milestone for the Company on the development of the Nullagine project. Black Iron`s planned 68% iron-grade magnetite pellet supply is among the top 4% of global production in terms of iron content and is expected to reduce emissions from steel production by about 30% compared to commonly used hematite fines with an iron content of 62%. The company said the high-quality product of the Shymanivske iron ore project will reach a higher price in various markets. The agreement is with Tennant Metals Pty Ltd, an Australian trading and investment company in the special metals sector. Under the terms of the agreement, Tennant Metals will act as agent and/or principal for the sale of 25% of the iron ore produced at Nullagine to Free on Board (FOB) for a period of at least five years from the expected start of production in early 2010. Under the terms of the agreement, glencore will ensure the life of the project with commercial terms of approximately 4 million tonnes per year for the first 10 years with the possibility of extending all tonnes of future iron ore production at Lake Giles for the next 10 years. Based in Singapore, Cargill Metals focuses on iron ore and steel trading. Cargill Metals connects iron ore mining companies around the world to steel mills and final steel consumers in key markets, trades more than 50 million tonnes of iron ore annually and also invests in a number of mining operations in North America and Northern Europe. He noted that the deal with Sinosteel now means that 100 percent of Iron Ridge`s planned iron production had been included in removal agreements after Atlas Iron`s subsidiary, Weld Ridge Iron Ore, began a marketing choice for 50 percent of the project`s production and revenue at the end of August.

BC Iron (ASX:BCI) announced that it has entered into a long-term agreement to remove 25% of future iron ore production from its 100% owned Nullagine iron ore project in the Pilbara region of Western Australia. On December 13, 2018, Macarthur Minerals announced that its Lake Giles iron project on Giles Lake in the Yilgarn region of Western Australia is adjacent to well-developed infrastructure and suitable for the export of iron ore. The withdrawal agreement will extend over the life of the mine and will include annual review periods. Iron ore sales are made freely on board, and the price structure is based on Platts` average monthly iron index and includes a premium to reflect the higher iron ore content of the concentrate. The agreement marks an important milestone for Strike and includes a $2 million upfront payment facility that will allow the Company to fund the initial shipment of ore. The price of ore is linked to the long-term reference price of iron ore, with appropriate adjustments for the superior quality of nullagin iron ore. Sinter testing work carried out independently in China by a large steel company in 2007 revealed that BC Iron`s particulate ore can be classified as “first class” in terms of sintering properties. Based on the proposal, the abduction agreement will initially have a duration of 10 years and will include a profit-sharing component.

On the profit share, Black Iron will receive 100% of the reference price for 65% ferrous thinners, currently sold at approximately $230 per tonne, and will share with Cargill a portion of the differential selling price of its 3% (68%) low-iron and magnetite product. “Development of the Iron Ridge site has already begun; We now have our final legal approval upon receipt of our operating license, and we are making good progress in meeting our previously stated schedule for initial iron ore sales in early 2021,” said Brierly. We have seen in the recent past the zeal of the Chinese to participate in projects aimed at securing their raw material supply chain. This is in line with China`s stated policy on resource security and the change in China`s dependence on BHP, Rio and Vale as a source of iron ore, for example. As a result, there was some competitiveness in the market to ensure acceptance.+ Agreements with local miners allow mining from certain sections of ownership, while shortening regulatory timelines and allowing for streamlined processes for environmental and other permits. The key features of these iron ore removal agreements are as follows: Mike Young, Chief Executive Officer of BC Iron, stated that the removal agreement with Tennant Metals represents an important positive milestone for the Company and reflects the superior quality of Nullagine`s ore product and its potential to generate very high market interest. The company said it was a plus to have a partnership for the marketing and sale of iron ore from the Bonnie Creek CID project starting in 2010. Things are heating up for promising iron ore producer Strike Resources in its Apurimac project in Peru. After starting mining just a few months ago, the Company has now entered into an agreement to remove 100% of the iron ore mined on the project over an initial period of two years, providing it with an upfront payment facility of $2 million. Macarthur owns 100% of the Moonshine Magnetite Project with an estimated Inferred and Indicated Mineral Resource of 1,316 million tonnes (Mt) and 30.1% iron (Fe). Initial metallurgical testing from the Moonshine core showed that a very high grade iron ore product between 68.5% and 69.1% Fe can be achieved as an export quality objective.

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