- Magnum Mining & Exploration (MGU) has begun offtake discussions for its Buena Vista Iron Ore Project with Anglo American
- MGU and Anglo have signed a mandate letter and an indicative term sheet in relation to offtake and pre financing discussion for the Nevada asset
- Initial terms could have the mining giant buy between 560,000 tonnes to 800,000 tonnes of MGU’s direct shipping ore (DSO)
- This would amount to 100 per cent of Magnum’s ore and would cost Anglo up to US$12 million (about A$15.48 million) in payments
- MGU shares are up 5.71 per cent at 18.5 cents per share at 1:56 am AEST
Magnum Mining & Exploration (MGU) has begun offtake discussions for its Buena Vista Iron Ore Project with Anglo American.
The two companies announced on Friday they’d signed a mandate letter and an indicative term sheet in relation to offtake and pre-financing discussions for the project in Nevada.
The letter allows Anglo and MGU 60 days to finalise a binding agreement, with both parties considering a 100 per cent offtake agreement
This would have the mining giant buy between 560,000 tonnes to 800,000 tonnes of MGU’s direct shipping ore (DSO).
In return, Anglo would pre pay MGU US$8 million (around A$10.32 million) as well as an additional vessel prepayment of US$4 million (roughly A$5.16 million).
Commenting on the initial agreement, Magnum Managing Director Dano Chan said the cash would help fund infrastructure and accelerate its DSO.
“Magnum is systematically delivering on its strategy of shipping ore in 2021 and the proposed agreement with Anglo American of a long-term offtake and financing is intended to be a key step in this process,” Mr Chan said.
Following today’s announcement, shares in Magnum Mining & Exploration were trading up 2.86 per cent at 18 cents per share at 1:56 am AEST.