Aurumin undertakes strategic sale of Mt Dimer iron ore rights
Aurumin (ASX: AUN) has made a strategic decision to sell the iron ore rights at its Mt Dimer project in Western Australia to focus on the area’s precious metal prospectivity and its other projects.
The company could earn $1.5 million in staged payments for the sale of iron ore rights on four of its Mt Dimer exploration tenements after signing a binding term sheet with Mineral Resources (ASX: MIN) subsidiary Polaris Metals.
Mt Dimer is located approximately 120 kilometres north-east of Southern Cross and nearby to MinRes’ Carina iron ore mine.
Under the term sheet agreement, Aurumin can receive an initial cash consideration of $250,000 on satisfaction of the sale’s conditions precedent.
Aurumin can also receive a further progress payment of $250,000 after the project is granted its first programme of works by the WA mining department.
It is also in line to receive further progress payments of up to a total of $1 million on a decision to mine, approvals to mine and mining.
Aurumin will also be paid a $1.00 per tonne royalty on any iron ore exported from the project.
The company can also receive a management fee for conducting MinRes approved exploration activity.
Unlocking further value
“We are pleased to have executed the agreement with MinRes for the iron ore rights at Mt Dimer,” Aurumin’s managing director Brad Valiukas said.
“This agreement allows Aurumin to unlock further value from Mt Dimer, complementing the sale of the mining tenements to Beacon Minerals (ASX: BCN) and will allow further reduction of the convertible note.”
“We maintain upside from both progress payments and future production and look forward to working with MinRes on the exploration programme.”
Historic gold district
The Mt Dimer project produced more than 125,000 ounces of gold from open pit and underground production of approximately 600,000 tonnes at 6.4 grams per tonne and has a substantial tenure footprint.
The project was discovered by WMC between 1987 and 1989 and mined by Tectonic Resources between 1994 and 1997.
Mt Dimer was last mined commercially in 1997 when the gold price was approximately $500 per ounce.
Exploration by the company during 2021 identified extensions to high-grade mineralisation at the Lightning, Golden Slipper and LO3 targets.
Beacon Minerals sale
In mid-November, Aurumin confirmed it had executed an agreement with Beacon Minerals for the sale of the Mt Dimer mining leases and miscellaneous licences.
Under that deal Aurumin can receive a cash consideration of $3 million payable on completion of all conditions precedent.
Aurumin will also receive a 2% net smelter return royalty on the Mt Dimer mining tenements on gold production above 12,000 oz and on all other minerals.
Other projects
Aurumin is focused on two project areas in Western Australia.
The Sandstone gold operations were a key component of the acquisition of the Central Sandstone project by the company in early 2022.
Sandstone comprises an 881,300 oz gold mineral resource, significant project infrastructure and an expanding tenement footprint.
The company’s Johnson Range project has a mineral resource of 64,700 oz at a grade of 2.51 g/t gold and is located midway between Southern Cross and Sandstone.