- Magnum Mining and Exploration (MGU) extends the exclusivity period of its agreement with Anglo American for the Buena Vista Project in Nevada
- The initial mandate letter, signed in June, allows 60 days to finalise a binding offtake agreement, with that period now pushed out to November 4
- The companies are considering a 100 per cent offtake deal, which would see Anglo buy up to 800,000 tonnes of direct shipping ore from MGU’s project
- Magnum advises its term sheet with Anglo remains unchanged
- Shares are down 11.5per cent to 11.5 cents each at 11:23 am AEST
Magnum Mining and Exploration (MGU) has extended the exclusivity period of its agreement with Anglo American for the Buena Vista Project in the US.
The companies signed a mandate letter and indicative term sheet in relation to offtake and pre-financing arrangements for the Nevada-based project back in June.
The initial letter allowed 60 days to finalise a binding agreement, with both parties considering a 100 per cent offtake deal.
That period has since been extended to November 4, with the parties still expecting to finalise well ahead of this date.
The potential deal would see Anglo buy between 560,000 tonnes and 800,000 tonnes of MGU’s direct shipping ore (DSO).
In return, Anglo would pre-pay Magnum US$8 million (A$10.9 million) and an additional US$4 million (A$5.45 million) vessel pre-payment.
MGU said it did not expect the extension to impact production timing given the ample time to finalise ahead of the first shipment of ore.
The deal reportedly embodies a significant opportunity for Magnum, being the delivery of hot briquetted iron and pig iron from the project and financing for phase two.
The company is actively reviewing opportunities in the region to increase its resource from land located adjacent and near to the existing Buena Vista mine.
The board is also working towards a bankable feasibility study to accelerate the project.
MGU advised the term sheet with Anglo American remained unchanged.
Magnum’s shares were down 11.5 per cent to 11.5 cents each at 11:23 am AEST.