By Anthony O. Goriainoff

 

Alien Metals Ltd. shares rose Wednesday after it said it had signed an agreement with Anglo American PLC for the exclusive right to negotiate up to $15 million in project funding and offtake agreements for the Hancock iron ore project in Australia.

Shares at 0711 GMT were up 0.15 pence, or 26%, at 0.73 pence.

The AIM-listed minerals-exploration company said the agreement with Anglo American includes a $10 million advance payment facility and a 100% offtake from the project for different types of ore, adding that the offtake terms will include prepayments for up to $5 million for the first 12 months.

An offtake agreement refers to the arrangement whereby a producer and a buyer agree to purchase or sell portions of the producer's upcoming goods.

The agreement achieved through its wholly-owned subsidiary Iron Ore Company of Australia Pty Ltd. also includes Anglo American receiving an agreed royalty for 24 months.

"This mandate letter supports our near-term production aspirations and, unlike conventional debt finance, the potential bespoke funding with offtake provides alignment between the parties for the pursuit of scale across multiple assets with a world class counterparty," Alien Metals Chief Executive Bill Brodie Good said.

 

Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com

 

(END) Dow Jones Newswires

August 31, 2022 03:37 ET (07:37 GMT)

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