- GWR Group (GWR) has signed a mining contract with Pilbara Resources Group (PRG) for PRG to carry out stage one works at the C4 Iron Deposit
- This deposit is part of the WA-based Wiluna West Iron Ore Project which will produce high-grade, low-impurity iron ore
- Since October, PRG has been conducting development, mining and transport works and is funding this on its own as GWR isn't required to cover any upfront capital or operational costs
- However, GWR will reimburse PRG for contract works
- GWR will retain 70 per cent of the project profit while PRG will take the remaining 30 per cent
- GWR is now progressing approvals as well as offtake agreements to sell its iron ore and hopes first sales will be made by the end of the year
- Company shares have gained a slight 3.03 per cent and are trading for 17 cents
GWR Group (GWR) has signed an alliance mining contract with Pilbara Resources Group (PRG) for PRG to carry out stage one works at the C4 Iron Deposit.
The C4 Iron Deposit is 1.4 kilometres long and is part of the Wiluna West Iron Ore Project in Western Australia.
The deposit contains a combined direct shipping ore (DSO) hematite and JORC 2004 mineral resource estimate of 21.6 million tonnes at 60.7 per cent iron. Of this, the stage one project is covering just one million tonnes of C4's mineral resource.
The C4 stage one project is targeting a 500-metre strike of outcropping, high-grade DSO hematite mineralisation within the larger deposit. Ultimately, the project will produce high-grade, low-impurity iron ore.
PRG is required to carry out development, mining and transport works at the project and it commenced this work in early October.
Specifically, PRG will construct the open pit, haul road and other facilities, as well as conduct infrastructure works, surveying, mining, crushing, screening and transport.
The contractee will provide its own project capital for the purpose of funding its performance under the contract. However, GWR will reimburse PRG for contract works.
Under the contract, GWR isn't required to provide any upfront capital or operational expenditure and will retain a 70 per cent share of the project profit while PRG will take the remaining 30 per cent. GWR will also maintain the rights for ore sales, strategy and timing.
Now, the company is progressing various approvals as well as offtake agreements for the sale of iron ore. It hopes that first sales of high-grade DSO iron ore will occur by the end of this year to be ready for shipment in early January.
Company shares have gained a slight 3.03 per cent and are trading for 17 cents at 1:03 pm AEDT.