BCK (ASX) Ann: Joint venture to propel Marillana into early production

Originally posted by sabine ↑

MinRes shakes off Atlas fizzer with Brockman JV deal

Stuart McKinnonThe West Australian
Friday, 27 July 2018 10:44AMStuart McKinnon

“Mineral Resources boss Chris Ellison has recovered quickly from the disappointment of missing out on Atlas Iron to strike a joint venture deal with Brockman Mining over its Marillana iron ore project.

Under the terms of the deal, MinRes will take a 50 per cent stake in the project in exchange for providing a rail and port solution for the long-stranded 1.5 billion-tonne deposit.

Marillana will form part of MinRes’ plans to develop its so-called Pilbara Infrastructure Development, which will involve using narrow-gauge light rail to transport ore from Iron Valley and the Marillana project 320km north to Port Hedland at a proposed new berth at South West Creek for export.

Mr Ellison has said previously the project could be viable based on 20 million tonnes per annum from Iron Valley, but the Marillana deposit provides the scale to ramp-up to the proposed nameplate capacity of 50mtpa.

It also boosts MinRes’ credentials to secure a State Agreement with the McGowan Government and secure access to a Cape-size berth at South West Creek.

The estimated $300 million cost of developing Marillana will be split between MinRes and Brockman, with the former operating and maintaining the project as joint venture manager.

MinRes will build, own and operate the crushing and beneficiation plants and product stockyard and train load-out facility.

The deal is subject to separate life-of-mine and rail-to-port service agreements.

Mr Ellison said he believed the Marillana product could be produced and delivered to China on a lowest-quartile cost basis globally.

Brockman chairman Kwai Sze Hoi described the deal as a logical and welcome outcome both for Brockman and the Marillana project.

“Access to infrastructure and economic alignment with an infrastructure owner are the keys to development in the Pilbara,” he said.

“This joint venture delivers all of the elements needed for the successful development of the wonderful Marillana orebody, including MRL’s Pilbara project development and mining services capability and expertise.

“Brockman is confident that Marillana’s superior quality ore will take its rightful place in the seaborne iron-ore trade very soon.”

The binding deal effectively cancels an agreement the Chinese-controlled Brockman had with the Balla Balla Infrastructure group, which is also planning an infrastructure project to transport iron ore from stranded assets via rail to a new port at Balla Balla.

MinRes last month walked away from a proposed takeover of Atlas Iron after Gina Rinehart’s Hancock Prospecting trumped his all-scrip bid with a $390 million cash offer.

Marillana lies 25km north west of Iron Valley near Newman and hosts a 1.5bt resource grading above 60 per cent iron.

Brockman shares soared on the announcement, up 16.7 per cent to 3.5¢ at 10.40am while MinRes shares were up 4.5¢ to $17.035.”

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I don' know how reporters get their facts wrong about the resource. Marillana doesn't have 1.6 billion tonnes at 60%, it's about 38%, but with beneficiation results in a completed product of circa 400 million tonnes at just over 61%.

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Ann: Joint venture to propel Marillana into early production, page-24

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