Brockman Mining Limited (“Brockman” or “the Company”) and Mineral Resources Limited (“MRL”) have on 22 April 2021 signed an Amended and Restated FJV Agreement and Deed of Amendment and Restatement (“Agreement”) through their subsidiaries, Brockman Iron and Polaris. Both Brockman and MRL conclude that the Farm-In Obligations under the Agreement has been satisfied and to progress on the projects as soon as possible the parties shall form the Joint Venture immediately. As such, 50% interest in the Marillana Project (the Farm-In Interest) will be transferred to Polaris and the Joint Venture will be established according to the terms of the FJV Agreement.
The Company and MRL also agreed that in addition to the Marillana Project, Brockman’s Ophthalmia Project will now be included in the Farm-In Interest, such that a 50% interest in the Ophthalmia Project will be transferred to Polaris. The transfer of 50% of the Ophthalmia Project to Polaris does not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules.
To date MRL has submitted Indicative Development Proposals, which include the following:
- Development of Marillana Project and Ophthalmia Project into an iron ore mining hub capable of producing a minimum of 25Mtpa of final product for export.
- Following the establishment of the Joint Venture, MRL (or its Related Party) agrees to provide the Joint Venturers with funding by way of a project loan sufficient to allow the Joint Venturers to fund the forecast project capital costs for each development.
- A build own and operate arrangement between the Joint Venturers and MRL for certain non processing infrastructure at Marillana Project.
- A build own and operate arrangement for the crushing plant at Ophthalmia Project .
- A proposed logistics system to transport the ore from the mines to the port stockyard at Port Hedland. This logistics system is to be constructed and operated by MRL (or a subsidiary).
- Construction of a berth at a dedicated location in Port Hedland subject to the approval from the State Government of Western Australia (the “Government”).
- A current market based estimate for project capital and operating costs, including the logistics services cost for transporting the ore from mine to ship.
Initial Development Works
Upon the formation of the Joint Venture, MRL (or a subsidiary) will immediately commence initial development works at Marillana Project and Ophthalmia Project mine sites, as well as on the prospective transport corridor and port area. The Initial Development Works are to be funded by MRL and the cost is estimated to be around A$105 million. The immediate commencement of these Initial Development Works is intended to speed up the development timeframe of both Marillana Project and Ophthalmia Project, which is currently estimated to be around 42 months from the formation of the Joint Venture.
Farm-in and Joint Venture Agreement
- Following the establishment of the Joint Venture, Project Loan from MRL (or its Related Party) will be available for the development of both Marillana Project and Ophthalmia Project.
- Polaris will release to Brockman Iron the remaining A$5 million of the A$10 million loan available to Brockman Iron under the FJV Agreement.
- The sunset dates for commencing construction of the proposed transportation and port systems and for commencing operations along with buy-back rights from Brockman are now removed.
- The Joint Venturers have the right to dissolve the Joint Venture when the projects are not able to be progressed due to factors beyond their control.
- A Joint Venture Committee shall be established immediately upon the formation of the Joint Venture.
