Condor Blanco Mines closes offtake deal with Jiangxi Resources for iron ore project in Chile
Chilean-focused Condor Blanco Mines (ASX:CDB) has signed a binding Offtake Agreement for iron ore produced from its 100%-owned Marianas Tailings Project.
In a coup for Condor, it struck an agreement with Hong Kong-based investment and commodity trading group, Jiangxi Resources, which acquired 22,628,571 shares in Condor directly in recent times. In itself, this investment by Jiangxi in Condor is an endorsement.
The Marianas Project is located within the city of Copiapo in northern Chile.
Jiangxi is a specialised investment and trading group.
Under the deal, Jiangxi will acquire ore from the Marianas Tailings project from Condor at a gate price of USD$60 per tonne, which given the low operating (and capital) costs, will see Condor pocket a very nice margin on cost price.
Offtake of iron ore will commence once recovery reports are completed and processing machinery has been transported to the Marianas sit and after financing of the project is completed.
Interestingly, the agreement does not preclude Condor from selling iron ore to third parties.
- This price will be adjusted annually based on the Platts Iron Ore index (IODEX).
- 1st year offtake is for delivery of between 153,000 to 189,000 tonnes.
- 2nd year offtake is for between 306,000 to 378,000 tonnes.
- 3rd year offtake is for between 1.02 Million tonnes – 1.26 million tonnes
- 4th year offtake is for between 1.26 Million tonnes – 1.53 Million Tonnes.
The Marianas project is involves the retreatment of an estimated 11 million tonnes of magnetite-bearing tailings with relatively straight-forward processing.
This should provide Condor with a fast start-up and payback, low-capex, cash-generating project, unusual among listed small cap explorers, with potentially less recourse to tap shareholders.
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