Koolyanobbing Iron Ore Royalty

Trident has entered into a conditional binding sale and purchase agreement with Fe Limited Pty Ltd to acquire a 1.5% FOB revenue royalty covering part of the producing world-class Koolyanobbing Iron Ore Operation in Western Australia.

Iron Ore

Asset Description & Key Metrics

  • The Koolyanobbing Iron ore Operation is owned and operated by Mineral Resources, an ASX listed mining and mine services company
  • Located 50km north of Southern Cross in Western Australia, with the Deception Pit located a further 100km north of Koolyanobbing
  • Deception contains a JORC compliant Reserve of 9.3Mt at 59.9% Fe and Mineral Resource (inclusive of Reserves) of 19.5Mt at 59.9% Fe
  • The royalty is payable on production from the M77/1259 tenement covering 798.4 ha, which forms part of the Deception Pit, one of the operating segments in the broader Koolyanobbing Operation
  • The Deception Pit is connected to Mineral Resources’ Windarling operation by a 20km haul road, which is then connected to Koolyanobbing
  • Material from Koolyanobbing is transported by rail south to Esperance Port where it is loaded for export
  • The ore is sold to several large steel mills in China under long term sales agreements
  • Koolyanobbing achieved an iron ore price for half year ended 31 December 2019 of A$103per wet tonne
  • Mineral Resources has ramped-up production to 11Mtpa as at February 2020, from the 6Mtpa run rate at the time of the acquisition
  • Recently, Mineral Resources announced its intention to further increase production from the whole Koolyanobbing operation to 15Mtpa by the end of 2020, with planning and approval processes already commenced

Since the first payment on the royalty, a total of approximately A$1,921,636 has been paid on shipments made to year-end 2019; with the most recent quarterly payment being A$731,733. In an ASX announcement dated 25 February 2020, Mineral Resources stated its intention of developing a 10-year strategy for its broader Yilgarn operation, including Koolyanobbing.

Summary of JORC Code 2012 Edition Compliant Reserves and Resources

The following tables set out the Mineral Reserves attributable to the entire Deception Pit per Mineral Resources ASX announcement dated 20 November 2019.  The royalty is only payable on production from the M77/1259 tenement which constitutes part of the Deception Pit, one of the operating segments in the broader Koolyanobbing Operation owned by Mineral Resources

Category
Cut-off (Fe %)
Tonnes (Mt)
Fe (%)
SiO2 (%)
Al2O3 (%)
SiO2 (%)
LOI (%)
Proved
-
-
-
-
-
-
-
Probable
54
9.3
59.9
4.84
1.96
0.118
6.13
Total
54
9.3
59.9
4.84
1.96
0.118
6.13

Source: For source and competent person credential, please review the ASX announcement dated 20 November 2019: https://www.asx.com.au/asxpdf/20191120/pdf/44brg5h9jyn2hy.pdf 

The following table sets out the Mineral Resources (inclusive of Reserves) attributable to the entire Deception Pit / Altair per Mineral Resources ASX announcement dated 20 November 2019. .  The royalty is only payable on production from the M77/1259 tenement which constitutes part of the Deception Pit, one of the operating segments in the broader Koolyanobbing Operation owned by Mineral Resources

Category
Cut-off (Fe %)
Tonnes (Mt)
Fe (%)
SiO2 (%)
Al2O3 (%)
SiO2 (%)
LOI (%)
Measured
-
-
-
-
-
-
-
Indicated
50
15.6
60.1
4.6
1.8
0.12
6.2
Inferred
50
3.9
59.3
5.7
2.1
0.11
6.2
Total
50
19.5
59.9
4.8
1.9
0.1
6.2

Source: For source and competent person credential, please review the ASX announcement dated 20 November 2019: https://www.asx.com.au/asxpdf/20191120/pdf/44brg3kydbzhkj.pdf

Trident is not aware of any other information relating to Resources and Reserve of the Deception Pit.