Flinders Mines Flinders Mines (FMS) has its farm-in agreement...

Flinders Mines

• Flinders Mines (FMS) has its farm-in agreement (FIA) with BBIG terminated by the latter, enabling the company to develop the Pilbara iron ore project (PIOP) as the sole owner
• Commenting on the termination, Chair Cheryl Edwardes says it provides the company with a more certain pathway to near term cashflow
• So far, Flinders has engaged in preliminary discussions on the staged development of the project with third parties, enabled by the grant of a waiver by BBIG of various restrictions
• The company confirms there will be one final shortfall payment of approximately $10 million as according to the terms in the FIA
• Shares in Flinders are up 41.5 per cent to close at 75 cents

Flinders Mines (FMS) has its farm-in agreement (FIA) with BBIG terminated by the latter, enabling the company to develop the Pilbara iron ore project (PIOP) in WA as sole owner.

Under the terminated agreement, BBIG was the manager of the project and had the opportunity to earn up to 60 per cent interest in the project.

However, BBIG will remain to provide management services for the project on a cost-recovery basis and at the direction of Flinders under the PIOIP Mine Co NL name.

So far, Flinders has engaged in preliminary discussions on the staged development of the project with third parties, enabled by the grant of a waiver by BBIG of various restrictions.

The termination of the FIA allows Flinders to negotiate a more flexible, staged development of PIOP.

Commenting on the termination, Chair Cheryl Edwardes said it provides the company with a more certain pathway to near term cashflow.

“Through the FIA, BBIG has progressed feasibility studies required to advance PIOP towards a final investment decision as well as providing valuable funding to Flinders under a shortfall provision, both of which provided considerable value to Flinders,” she said.

“BBIG remains important to Flinders’ long-term future through its potential infrastructure solutions for the Balla Balla Port and through its state rail agreement and associated permits required for a high volume infrastructure solution for PIOP.

“Discussions will continue regarding possible ways of Flinders accessing BBIG’s infrastructure solutions and the non-binding indicative offer lodged by BBIG remains unaffected by the change to the FIA.”

The company confirmed there will be one final shortfall payment of approximately $10 million as according to the terms in the FIA.

Shares in Flinders were up 41.5 per cent to close at 75 cents.