GWR Group has granted mining rights for its C4 iron deposit in Western Australia – and transferral of its residual rights in relation to the JWD iron deposit – for $30 million plus potential royalties to Gold Valley Iron.
GWR has mining approvals in place for the C3 deposit located to the south of C4 and for the Bowerbird deposits located to the east of C4, and a further 10 deposits forming part of the Wiluna West Iron Ore Project.
In addition, Gold Valley is acquiring sundry plant and equipment, stores and C4 ore stockpiles for $5m.
Gold Valley companies are a multi-sector conglomerate consisting of interests in mining, agriculture (vineyards) and energy.
GWR chairman Gary Lyons said the move highlighted the potential value to be unlocked across the remaining 11 deposits that GWR owns.
“GWR has been dealing with Gold Valley for a number of years in relation to the JWD deposit, over which time GWR has received a number of payments,” he said.
“GWR has also undertaken standard due diligence reviews of publically available information to satisfy itself as to Gold Valley’s financial capacity to perform its obligations
GWR retains both legal and beneficial ownership to all tenements and all other iron ore deposits at the project.
The company plans to use the funds to:
- re-evaluate the development models for both the C3 and Bowerbird deposits
- review the logistical options available to the group to improve margins through lower transport costs for its iron ore deposits
- bring forward planned field work and development studies on the group’s Prospect Ridge Magnesite project in Tasmania, including a 7350-metre RC drilling program.
GWR is transforming from an explorer to a producer with the beginning of mining operations at Wiluna West, with first export shipments leaving since early 2021.
GWR has a July fixed price shipment of ore mined from C4 at $US114/t FOB, which is scheduled to commence loading on or around July 22. GWR has three further shipments scheduled for August, September, and October 2022 but has the right to terminate those shipments in the event Gold Valley meets its obligation to make the additional $5m payment due 21 days after signing the Term Sheet.