CuFe moves to 100% ownership of JWD iron ore rights

CuFe is set to increase its interest in the iron rights over the JWD iron ore mine in WA from 60% to 100%.

The company will issue 150 million shares in consideration to Gold Valley Iron Ore (GVIO) and refund the historical $1.32m cash contribution made by GVIO under the JWD Joint Venture.

The issue of consideration shares will result in GVG’s relevant interest in CuFe (ASX:CUF) increasing from approximately 19.84% to 35.38%, pending shareholder approval at a General Meeting, which is expected to be held in April 2023.

“Given our positive outlook on the iron ore price for 2023 it makes sense for us to maximise our exposure to it via increasing our ownership in JWD,” executive director Mark Hancock said.

Exercising option to mine a further 900,000mt

The company is also exercising its right to access a further 900,000mt of iron ore at the JWD resource.

The plan is for the original exercise price of $2.25m to be settled via transfer of 5% of its joint venture interest in the Tennant Creek copper project to Gecko Mining Company (GMC), who presently owns the remaining 40% interest in the JV in the Northern Territory.

“In addition to the JWD acquisition this holistic transaction with Gold Valley Group has the benefit of preserving cash by facilitating the settlement of an upcoming financial obligation via an asset swap for a small portion of our Tennant Creek Joint Venture interest and deferring our Yarram financial obligations,” Hancock said.

Upon completion, the JV will continue operating with the parties’ respective new interests (55% CuFe and 45% GMC).

Yarram JV milestone payment variation

CuFu has also restructured the milestone payment under the Yarram iron ore JV, also in the Northern Territory where a resource update is scheduled in the near-term.

The original plan was for the company to make a milestone payment to Goldvalley Brown Stone (GVBS) of $500k in cash and $1m in cash or shares at CuFe’s election, payable upon the company announcing an Indicated JORC Mineral Resource Estimate of 3mt grading in excess of 60%Fe at project.

Now, CuFu has agreed to carry the next $500k of GVBS’s joint venture costs under the JV and the $1m payable to GVBS in cash or shares at CuFe’s election will be deferred until a decision to mine is made on the project.

“While the primary focus of this transaction is JWD we remain excited by the potential of both Yarram and Tennant Creek, with announcements expected in the near future on the mineral resources at both those projects,” Hancock said.

This article was developed in collaboration with CuFe Limited (ASX:CUF), a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.