Total
0
Shares
WA exports boost economy during COVID-19 turmoil
Iron Ore Port Hedland, Western Australia. Source: Reuters
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Flinders Mines (FMS) and BBI Group have reached an agreement which will see BBI hand over $1 million to cover the cost of fees incurred in negotiations
  • Both parties teamed up to develop the Pilbara Iron Ore Project in WA early in 2020 before BBI proposed Flinders buy its infrastructure associated with the asset
  • The company argued it would make financing easier if one business owned the Iron Ore project and associated port, rail and other infrastructure
  • This latest $1 million payment from BBI would cover the cost of Flinders leaving their original agreement and taking over the infrastructure
  • The money would be handed over in three parts, however, the funding would need to be repaid if a transaction is executed before the end of 2021
  • Shares in Flinders Mines have ended the week slightly up, trading at 97 cents each, up 2.13 per cent

BBI Group has agreed to hand over $1 million to Flinders Mines (FMS) to cover the cost of fees incurred in ongoing negotiations over the Pilbara Iron Ore Project.

The two companies signed a farm-in incorporated joint venture to develop the WA-based asset early last year, with activities beginning in September.

Change in agreement

Since then however, BBI Group has proposed that Flinders buy its port, rail and other infrastructure assets which will be used in the wider Pilbara Project.

BBI argued it would make financing easier if only one business owned the Iron Ore project and associated infrastructure assets.

The company offered to sell its port and rail subsidiaries and infrastructure, held under a subsidiary called Forge Resources Swan, for $1.

Flinders didn't accept or reject the offer when it was first made, instead stating that the deal needed to be investigated.

What next?

Since the proposal was put forward by BBI Group, Flinders Mines has agreed for the company to pay any fees it incurs that are associated with changing the original farm-in agreement.

The $1 million in funding will be handed over in three tranches over the coming year, however, Flinders may have to repay that money.

FMS said in Friday's market release that "the funding is only repayable if a transaction is executed and subsequently completed, on the later of the completion date and December 31, 2021."

At this stage, no agreement has been reached on Flinders taking over BBI's infrastructure assets, though discussions are continuing.

Shares in Flinders Mines have ended the week slightly up, trading at 97 cents each, up 2.13 per cent.

FMS by the numbers
More From The Market Herald
Verbal flub by ex-Myer CEO comes to a five year close after class action

" Myer (ASX:MYR) experiences online sales boost as pandemic stunts foot traffic

Despite pandemic hindrances to its brick and mortar stores, strong online sales growth and lower costs fuelled a net profit in Myer’s (MYR)
Armour Energy (ASX:AJQ)- CEO, Brad Lingo - The Market Herald

" Armour Energy (ASX:AJQ) proposes split and new listing for oil and gas ventures

Armour Energy (AJQ) is eyeing a demerger from its Northern Basin Oil & Gas Business into a newly formed ASX-lister.
Neurotech (ASX:NTI) - Chairman, Brian Leedman - The Market Herald

" Neurotech (ASX:NTI) looks to bank $3.5M via placement and underwriting exercise

Neurotech (NTI) is set to pocket $3.5 million via an underwritten exercise options shortfall and an oversubscribed private placement.
Firefly Resources (ASX:FFR) - Managing Director, Simon Lawson - The Market Herald

" Firefly Resources (ASX:FFR) subsidiary set to take flight on ASX

The ASX has granted Firefly Resources’ (FFR) subsidiary, Firebird Metals, conditional approval to list on the exchange.