Macro Metals Limited (ASX:M4M) (Macro or the Company) is pleased to announce it has signed a binding Heads of Agreement with Firebird Metals Ltd (ASX: FRB) (Firebird) to acquire an 80% interest in each of the Wandanya, Disraeli and Midgengadge Manganese Projects (comprising (E46/1456, E46/1457, E46/1389 and E45/5906) (Projects), located in the East Pilbara region of Western Australia (Acquisition).
The consideration payable by Macro for its 80% interest in the three Projects is: minimum aggregate expenditure of A$150,000 across the three Projects within 12 months of completion of the Acquisition and at least 10 Reverse Circulation (RC) drill holes for a minimum of 100 metres drilled in total on each Project, the costs of which shall be included in calculation of the A$150,000 minimum aggregate expenditure.
Macro will free carry Firebird at 20% on each Project through to the completion of a Project Execution Plan (which shall include a high level mine plan, and capital and operating budget estimates) and the giving of a decision to mine (DTM) by Macro. During this period, Macro will also be solely responsible for keeping the tenements in good standing by meeting the minimum annual expenditure commitments.
Should Macro make a DTM in respect of a Project then: Firebird may elect to retain its 20% interest and form an incorporated joint venture with Macro on a 20% Firebird : 80% Macro basis (SPV); or convert its project equity interest into a 1% free on board (FOB) royalty on all product produced and sold from the Project.
If an SPV is formed, then it will enter into a life of mine, mining services contract (Mining Services Contract) with Macro Mining Services Pty Ltd, a wholly owned subsidiary of Macro (MMS). Under the Mining Services Contract, the SPV must appoint MMS as the operator of all mining operations to be conducted by the SPV for the life of mine. MMS will be exclusively responsible for managing and/or self-performing all activities required to develop and operate each mine including, but not limited to, project development, construction, mine planning, drill and blast, mining load and haul, crushing, screening and processing, off-site haulage, port services and international shipping (Mining Services). MMS shall provide the Mining Services to the SPV on an arms' length basis that includes commercial margins being applied to all overhead, capital and operating expenditure MMS incurs in providing the Mining Services. In addition, the SPV will enter into a sales and marketing agreement with Firebird pursuant to which Firebird will be entitled to receive a commission of 1% of the actual FOB value realised by the SPV from product sold by Firebird. Firebird may also give notice to the SPV electing to acquire any volume of product produced by the SPV at prevailing market prices for use in its own downstream processing operations. MMS aims to leverage the Company's existing in-house capability of fast tracking permitting, exploration and development of exploration assets by entering into agreements with third parties that have suitable assets warranting development to secure a meaningful project equity stake as well as life of mine, mining services contracts for the entire pit to customer supply chain. Completion of the Acquisition is conditional upon due diligence to the absolute satisfaction of Macro and any necessary regulatory or third-party consents or approvals required before close of business on 30 September 2024 (or such time as otherwise agreed)
Mr Simon Rushton, Managing Director said: 'I am really pleased to have negotiated Macro's first joint venture and launch our mining services division. My aim is to build core project development, construction and operational teams within Macro supported by an appropriately resourced corporate team. There is a minimum overhead required regardless of whether you are supporting one operation or several and the key to being sustainable through the commodity cycles is to get the unit cost of support and operational services down as quickly as possible. By providing mining services to third parties we can scale our teams quicker than by only providing services as we bring each of our own projects into operation. This means we have more resources, a wider array of skills and experience, redundancy and flexibility sooner; all of which are crucial for safely running a profitable, sustainable diversified mining and mining services business. We will look to take the organic mining services revenue and our 80% profit share from exploiting the DSO manganese and investing it into our iron ore projects as well as growing our mining services capabilities. Importantly, this potential revenue may enable us to evaluate and organically fund a future manganese beneficiation operation likely using simple dense media separation post crushing and screening.
Contact:
Simon Rushton Alex Cowie
Managing Director NWR Communications
Tel: +61 412 952 610
Email: alexc@nwrcommunications.com.au
About Macro Metals Limited
Macro's Iron Ore portfolio has the potential for multiple sources of iron ore production utilising the well-established and proven export infrastructure of the Pilbara and emerging infrastructure in the West Pilbara. The Company is focussing on expediting the development of its Cane Bore, Catho Well, Turner and Goldsworthy projects. Utilising a fit for purpose, safety and results focused, rapid development approach across the Macro assets the Board sees substantial scale and the real potential for Macro to quickly become a multi mine iron ore producer.
Competent Person's Statement
The information in this announcement that relates to the East Pilbara Manganese Portfolio is based on information compiled and fairly represented by Mr Robert Jewson, who is a Member of the Australian Institute of Geoscientists and Executive Director of Macro Metals Limited. Mr Jewson has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he has undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Jewson consents to the inclusion in this report of the matters based on this information in the form and context in which it appears. Mr Jewson is a shareholder of Macro Metals Ltd.
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