Anax Metals welcomes Anglo American as its Whim Creek project partner
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Anglo American has agreed to partner Anax Metals (ASX:ANX) to develop its Whim Creek copper-zinc project in WA’s Pilbara region with a $US20m ($26.2m) funding package and off-take arrangement.
The major miner will acquire a 1 per cent net smelter return for $US2m over copper and zinc from Whim Creek for the life of its mine payable to Anax Metals on the execution of a binding agreement.
Anglo American subsidiary Anglo American Marketing has entered into a non-binding agreement with Anax Metals to fund the development of Whim Creek and the parties are working on binding documentation for the deal.
“Binding agreement would be a major milestone for the Anax Metals strategy of securing funding from a highly regarded and strategic funding partner,” said the company.
Anglo American’s funding package is intended to cover the capital expenditure and other financial commitments required to start production at Whim Creek.
The development expenditure includes the refurbishment of existing site infrastructure, installation of new ore sorting and gravity separation circuits and heap leach equipment.
Anax Metals and its joint venture partner is currently undertaking a feasibility study for Whim Creek as it works to advance the project through development studies and exploration.
Anglo American will have the right to offtake all of Anax Metals’ production from Whim Creek at a price linked to an average market rate.
Whim Creek project is near Port Hedland in WA, Image: company supplied
The company has an 80 per cent equity stake in the Whim Creek project located 115km southwest of Port Hedland that it earned from Ventures Resources (ASX:VXR).
Anax Metals said the deal with Anglo American is an endorsement of its strategy to unlock asset value through the integration of technology in its project.
The explorer is looking at expanding its project portfolio using its strategy and important partnerships it has established to date.
The Whim Creek project comprises four separate deposits, Mons Cupri, Whim Creek, Salt Creek and Evelyn and Anax Metals has started exploration activity for gold and base metals on the project tenements.
Meanwhile, AVZ Minerals (ASX:AVZ) has inked its first off-take agreement for tin from its Manono tin and lithium project in the Democratic Republic of the Congo.
AVZ Minerals is to supply commodity trading company Noble Group subsidiary Kalon Resources with 600 tonnes per year of tin concentrate over the agreement’s three-year term.
Kalon Resources is a major participant in the international tin market, handing several thousand tonnes of tin concentrate per year.
“After an unexpected delay in finalising this contract, we are very pleased to have finally signed with Kalon, our first tin off-take agreement — just weeks after having signed our second lithium off-take agreement that cumulatively provides binding commitments for more than 50 per cent of our saleable SC6 product,” managing director, Nigel Ferguson, said.
The London Metal Exchange’s tin futures contract has gained approximately 30 per cent in the year to date, the company noted.
“While this agreement represents a relatively small, but growing portion of revenue for the Manono project, it does confirm another large international business is willing to secure future supply from the project,” said Ferguson.
The tin supply deal with Kalon Resources will assist the company in meeting certain conditions precedent required by its prospective financiers.
The pricing for the deal is linked to the LME tin price, and the delivery point for the metal is the bonded warehouse at Lubumbashi, 500km south of the Manono project, in the DRC.