I think ELE was extremely fortunate that ICA Mining went into administration as it had trouble raising funds. This put Elmore in the box seat as it was a creditor plus had the expertise to pull it off. Being able to negotiate a higher management fee plus the Royalty fee of $2/tonne was good but the 25% share of profits is the bonus.
ICA Mining bought the Peko Mine’s tailings, which are split across four dams at the mine. It plans to use the tailings, "to extract premium grade iron ore and metals, including copper, gold and cobalt."
The fact that this is an old discarded site it has been mentioned that the NT Government might reduce royalties due to them cleaning up an old site.
There is a lot to like about this project.
ICA Mining told potential investors that the magnetite plant would be commissioned in the next few months, and it wanted to ramp up production and be ready to export iron ore in September. ASX-listed Qube is already engaged to help secure rail, road and port access and stevedoring, the information memorandum said.
It is understood the funding round is pitched at special situations types, who may be better able to value a start-up project and see long-term value than a big four bank. Sources said it was marketed with an ESG bent – it’s about re-using and rehabilitating the old Peko Mine site, rather than a traditional brownfield asset.
There’s $25 million that needs to be refinanced, which includes a working capital facility, acquisition of the land and all of the costs to get the tailings refurbishment up and running.
ICA Mining reckons it could make significant free cash flow as a high-margins, low-cost producer.
The data room opened this week, sources said, while the Northern Territory also gave the re-treatment project the green light. If it works, there could be potential for ICA Mining to work with other explorers and producers in the area to run similar rehabilitation projects.
Expand
(20min delay)