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- Ore Purchase Agreement signed with MEGA Resources
- Right to purchase and process up to two million tonnes of ore over 24-month period
- Five-year Master Services Agreement also signed with MEGA
- Establishes preferred framework for the provision of future open pit mining
Forrestania Resources (ASX: FRS) has signed two significant long-term commercial agreements with MEGA Resources supporting the company’s processing hub and regional growth strategy in WA.
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The company has executed:
• an Ore Purchase Agreement providing Forrestania with the right to purchase and process up to 2 million tonnes of ore over a 24-month period; and
• a five-year Master Services Agreement establishing a preferred framework for the provision of future open pit mining, drill and blast, mining support and related services across Forrestania’s asset portfolio.
Executive chairman, David Geraghty, said the agreements strengthen Forrestania’s ability to source third-party ore into its processing hubs while also establishing a strategic mining services relationship capable of supporting future mining activities at Lake Johnston, Edna May and other regional opportunities.
“The execution of both the Ore Purchase Agreement and Master Services Agreement with MEGA Resources represents another important step in advancing Forrestania’s processing hub strategy and restart readiness initiatives,” Mr Geraghty said.
“First ore to be sourced under the agreement will come from current stockpiles at the Taipan open pit operating by MEGA Resources.
“The agreement provides a commercial framework to source and process third-party ore through our Lake Johnston and Edna May facilities, whilst the master services agreement establishes a long-term strategic relationship with an experienced mining contractor and provides Forrestania with flexibility and optionality as we progress future mining developments across our portfolio.”
Under the Ore Purchase Agreement, MEGA may supply ore to Forrestania for processing through either the Lake Johnston or Edna May processing facilities at Forrestania’s election. The agreement provides for campaign-based processing arrangements with parcel sizes ranging from 50,000 tonnes to 150,000 tonnes, subject to agreed grade, metallurgical and acceptance criteria. The agreement has a term of 24 months and a maximum aggregate quantity of two million tonnes.
Under the five-year Master Services Agreement, MEGA may undertake future mining and associated works for Forrestania.
Mr Geraghty said that agreement provides a mechanism for the rapid deployment of mining services through project-specific work orders without requiring full contract renegotiation for each project.
FRS was steady at 36.3¢ with a Mkt cap of $867.2M prior to markets opening.
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