REG - Alien Metals Limited - Revised contract for 90% of Hamersley Iron Project

Alien MetalsAnnouncement

24/08/2022 07:01

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RNS Number : 9803W  Alien Metals Limited  24 August 2022

 

Trading Symbols

AIM: UFO

FWB: I3A1

24 August 2022

 

Alien Metals Ltd

("Alien" or "the Company")

 

Revised agreement for Alien to acquire 90% of Hamersley Iron Ore Project

 

Alien Metals Ltd (LSE AIM:UFO), a global minerals exploration and development
company, is pleased to advise that it has executed a binding put and call
option agreement ("Option Agreement") with Windfield Metals Pty Ltd
("Windfield") granting the Company the option to acquire an additional 39%
interest in the Hancock and Brockman DSO iron ore projects ("Projects"). This
arrangement replaces the agreement announced on 20 May 2021, whereby Alien and
Windfield had agreed for Alien to acquire 80% of Windfield, which holds the
other 49% of the Projects, thereby giving Alien an indirect 90% interest.

 

Alien currently has a 51% direct interest in the Projects, with the remaining
49% held by Windfield. The parties have been in ongoing discussions regarding
Alien increasing its interests in the Projects. Pursuant to the Option
Agreement with Windfield, Alien can acquire an additional 39% interest in the
Projects from Windfield, thereby increasing Alien's direct holding to 90%
("Option"). To exercise the Option, Alien will pay total consideration of
£1,794,104, which consists of a cash payment of £60,000 and the issue of
260,000,000 ordinary shares at a deemed issue price of £0.0067 pence per
share (being the 20-day volume average weighted price of Alien shares on the
day that is 20 business days immediately prior to the execution of the Option
Agreement) and the issue of 100,000,000 share warrants exercisable at 1 pence
each. Alien has an 18-month period to exercise the Option, although the
Company intends to action earlier. Such exercise is conditional on Alien
receiving approval to issue the consideration shares and the parties entering
into a deed of assignment and assumption in relation to the Hancock project
native title Heritage Agreement.

 

Dan Smith, Non-Executive Chairman of Alien Metals, commented: "The execution
of the revised binding option agreement with Windfield is a key milestone in
the development of both the Hancock and Brockman iron ore projects, as we can
now drive both forward knowing the Company has de-risked the projects with the
ability to move to a 90% project interest.

 

"The Iron Ore Company of Australia ("IOCA") team is fully focussed on getting
the Hancock project into production in the first half of 2023, while
exploration work on the highly prospective Brockman and Vivash projects
remains ongoing.

 

"The Company looks forward to updating investors on the development of Hancock
in coming weeks".

 

 

 

Figure 1: Location of Hamersley Iron Ore Project Tenements, Western Australia

 

Hancock:

Hancock hosts a JORC compliant inferred Mineral Resource of 10.4Mt @ 60.4% Fe
(Announcement: 22 September 2021), and as announced earlier this year, the
project hosts significant potential to find more DSO grade material on the
tenement across ridges F, G & H (announcement: 30 March 2022).

 

Table 1: Mineral Resource Statement, Hancock Iron Ore Project, Alien Metals,
September 2021 Gross Basis

                  Target           Mass               Average Value

                                   (Million tonnes)
 Classification                    Fe                       SiO(2)  Al(2)O(3)  P     LOI  MnO

 Category
                                   %                        %       %          %     %    %
 Inferred        Sirius Extension  7.8                60.1  4.1     3.72       0.17  5.2  0.05
                 Ridge E           1.5                61.2  4.8     3.38       0.13  3.5  0.02
                 Ridge C           1.1                61.9  4.4     2.93       0.12  3.5  0.03
 Total                             10.4               60.4  4.2     3.6        0.16  4.8  0.04

 

 

 

 

 

 

Table 2: Mineral Resource Statement, Hancock Iron Ore Project, Alien Metals,
September 2021 Gross and Net Attributable at 51%

 

                  Target                                Net attributa-ble to Alien (51%)  Average Value
 Classification                    Mass Million tonnes  Fe                                      SiO(2)  Al(2)O(3)  P     LOI  MnO

 Category
                                                        %                                       %       %          %     %    %
 Inferred        Sirius Extension  7.8                  3.98                              60.1  4.1     3.72       0.17  5.2  0.05
                 Ridge E           1.5                  0.77                              61.2  4.8     3.38       0.13  3.5  0.02
                 Ridge C           1.1                  0.56                              61.9  4.4     2.93       0.12  3.5  0.03
 Total                             10.4                 5.31                              60.4  4.2     3.6        0.16  4.8  0.04

 

 

Hosting direct shipping (DSO) grade iron ore with low impurities, the Company
is confident that future production from Hancock will be a highly sought-after
product. As such, the IOCA team is driving development plans forward on all
fronts.

 

 

Figure 2: Location and results of rock chip sampling program, Hancock Iron Ore
Project, Western Australia, March 2022

 

The Company is continuing with metallurgical work, as well as offtake &
marketing strategies and discussions at Hancock. Additionally, compliant
tender requests from third-party contractors to support the Hancock mining
project (along with continued field work) remain ongoing.

 

 

KEY TERMS OF THE OPTION AGREEMENT:

1.    Under the terms of the Option Agreement, Alien can acquire an
additional 39% interest in the Projects from Windfield Metals Pty Ltd
(Windfield) through paying the following consideration to Windfield:

a.    £60,000 cash payable on signing of the Option Agreement;

b.    260,000,000 UFO shares issued at a deemed price of £0.0067 pence
each (Deemed Issue Price) on exercise of the option; and

c.     100,000,000 share purchase warrants, exercisable at 1 pence each
before 31 December 2025,

together, the Upfront Consideration,

2.    Alien will free-carry Windfield's remaining 10% shareholding in the
Projects until completion of a Bankable Feasibility Study on either the
Brockman or Hancock Ranges projects.

3.    The Option Agreement is subject to various standard conditions
precedent and contains standard warranties on both Alien and Windfield.

4.    If, within 60 months of executing the Option Agreement, Alien
disposes of its interest in the Projects, the Company will pay Windfield a
performance payment in addition to the Upfront Consideration (Performance
Payment).

5.    The Performance Payment is calculated by:

a.    In the event of a Tenement Sale: 50% of the value uplift attributable
to the Projects;

b.    In the event of an IPO/Spin-out event on a recognised stock exchange:
50% of the value uplift attributable to the Projects; or

c.     In the event a decision to mine is made: 50% of the project
valuation uplift attributable to the Projects.

In each case, the uplift payments are reduced by 50% of the incurred project
expenditure.

 

As part of the transaction Alien has agreed to transfer its interest in the
Projects to its wholly owned subsidiary, IOCA, which will become the manager
of the Projects.

 

In the 12 months to 31 December 2021 the Projects incurred costs of US$1.5m
with Alien funding 100% of the projects and as such 100% of the costs are
reflected in the accounts. The carried value of the Hamersley Project as at 31
Dec 2021, being the last audited financial statements, was US$2,025,320.

 

For further information please visit the Company's website at
www.alienmetals.uk, or contact:

 

Alien Metals Limited

Dan Smith, Non-executive Chairman

Email: dsmith@alienmetals.uk

Bill Brodie Good, CEO

Tel: +44 20 3811 2144

 

Beaumont Cornish Limited (Nomad)

James Biddle / Roland Cornish

www.beaumontcornish.com

Tel: +44 (0) 207 628 3396

 

Turner Pope Investments (TPI) Limited (Joint Broker)

Andrew Thacker / James Pope

Tel: +44 (0) 20 3657 0050

 

WH Ireland Ltd (Joint Broker)

Harry Ansell / Katy Mitchell

Tel +44 (0) 207 220 1666

 

Yellow Jersey PR (Financial PR)

Sarah Hollins / James Lingfield

alienmetals@yellowjerseypr.com

Tel: +44 (0) 20 3004 9512

 

Notes to Editors

 

Alien Metals Ltd is a mining exploration and development company listed on the
AIM market of the London Stock Exchange (LSE: UFO). The Company's focus is on
precious and base metal commodities, with its operations located in proven
mining jurisdictions and it has embarked upon an acquisition-led strategy
headed by a high-quality geological team to build a strong portfolio of
diversified assets. In 2019, the Company acquired 51% of the Brockman and
Hancock Ranges high-grade (Direct Shipping Ore) iron ore projects, with an
option to move to a 90% interest in the Hamersley Iron Ore Project. The
Company also acquired 100% the Vivash Gorge Iron Ore Project from Zenith
Minerals in May 2022.

The Company acquired 100% of the Elizabeth Hill Silver Project, which consists
of the Elizabeth Hill Historic Silver Mine Mining Lease and the 115km2
exploration tenement around the mine. The Company also holds two silver
projects, San Celso and Los Campos, located in Zacatecas State, Mexico,
Mexico's largest silver producing state, which produced over 190m Oz of silver
in 2018 alone, accounting for 45% of the total silver production of Mexico for
that year. The Company also holds a Copper Gold project in the same region,
Donovan 2.

In March 2022 the Company acquired 100% of the former joint venture interest
in the Munni Munni Platinum Group Metals and Gold Project in the West Pilbara,
Western Australia, one of Australia's major underexplored PGE and base metals
projects. Munni Munni holds a historic deposit containing 2.2Moz PGM3:
Palladium, Platinum, Gold, Rhodium.

Glossary

Mineral Resource - A concentration or occurrence of solid or liquid material
of economic interest in or on the Earth's crust in such form, grade (or
quality), and quantity that there are reasonable prospects for eventual
economic extraction. The location, quantity, grade (or quality), continuity
and other geological characteristics of a Mineral Resource are known,
estimated or interpreted from specific geological evidence and knowledge,
including sampling. Mineral Resources are sub-divided, in order of increasing
geological confidence, into Inferred, Indicated and Measured categories.

DSO - Direct Shipping Ore

Deleterious Elements - Elements that can be detrimental to the overall
product, such as

Phosphorus.

Green Iron Ore - High Grade > 60% Iron Ore needing lease processing for
manufacture of steel

Fe - Iron

Al - Aluminium

Ca - Calcium

K - Potassium

Mg - Magnesium

Mn - Manganese

Na - Sodium

P - Phosphorus

S - Sulphur

Si2O3 - Silica

Mt - Million Tonnes

BIF - Banded Iron Formation

 

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