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- Genmin (GEN) strikes a royalty agreement with global mining company Anglo American over the Baniaka iron ore project in Gabon, Central Africa
- Anglo American will pay Genmin US$10 million for a one per cent sales royalty from the first 75 million tonnes of iron ore products to be produced and sold from Baniaka
- Further, Genmin and Anglo American plan to negotiate a potential US$75 million funding deal for Baniaka and an offtake agreement for iron ore from the project
- Genmin CEO Joe Ariti says Anglo American is an ideal potential partner for the company to achieve its goal of pioneering iron ore production in Gabon in a sustainable way
- Shares in Genmin are up 5 per cent to 21 cents per share at 10:22 am AEST
Genmin (GEN) has struck a royalty agreement with Anglo American’s subsidiary, Anglo American Marketing, over the Baniaka iron ore project in Gabon, Central Africa.
Under the deal, Anglo American will pay Genmin subsidiary Gabon Iron Ore (GIOL) US$10 million (A$14.7 million) to receive a one per cent sales royalty from the first 75 million tonnes of iron ore products to be produced and sold from Baniaka.
Genmin will have the right to buy back the royalty at any time at an agreed internal rate of return (IRR) on Anglo’s initial cash payment.
Further, GIOL and Anglo American also plan to negotiate a potential US$75 million funding deal for Baniaka and an offtake agreement for iron ore from the project.
Genmin CEO Joe Ariti said Anglo American was an ideal potential partner for the company to achieve its goal of pioneering iron ore production in Gabon in a sustainable way.
“The US$10 million consideration provides no dilution to our existing shareholders and will immediately boost our cash position,” Mr Ariti said.
“The agreement provides a mechanism to negotiate and agree in the medium-term potential development funding, and over the long-term, an offtake solution.
“This agreement also supports our near-term production aspirations and, unlike conventional debt finance, the potential bespoke funding with offtake provides alignment between the parties for the pursuit of scale.”
GIOL will grant Anglo American an exclusivity period of 120 calendar days from the delivery of the Baniaka preliminary feasibility study (PFS) to conduct confirmatory due diligence ahead of the funding and offtake deals.
Genmin said it planned to deliver the Baniaka PFS by the end of the September quarter.
Shares in Genmin were up 5 per cent to 21 cents per share at 10:22 am AEST.
