Genmin Receives US$10 Million Royalty on First Sale of Baniaka Iron Ore Product
African iron ore explorer and developer Genmin (ASX: GEN) has received a US$10 million royalty from Anglo American Marketing in relation to its Baniaka iron ore project located in Gabon.
Earlier this month, Genmin announced that its wholly-owned subsidiary, Gabon Iron Ore, had reached a 1% royalty agreement with Anglo, which is owned by major global mining company Anglo American plc.
The payment was made on the basis of revenue from the sale of the first 75 million tons of iron ore produced and sold in Baniaka.
Genmin has also granted Anglo American an exclusive right to negotiate and agree terms for project financing of up to $75 million and up to 100% of Baniaka levies.
The exclusive right begins upon delivery of the Baniaka preliminary feasibility study by the end of the September quarter and will last for 120 days.
During the signing of the royalty agreement, Genmin CEO Joe Ariti said he was pleased to be dealing with a mining company of Anglo American stature.
“We see Anglo American as an ideal potential partner for us in achieving our goal of pioneering iron ore production in Gabon in a sustainable manner, given Anglo American’s heritage in Africa and its commitment to sustainable operations and activities as a producer and distributor of iron ore,” he said.
“This agreement supports our near-term production aspirations and the potential bespoke funding with levy enables alignment between [our two companies] for the pursuit of scale.
Global resource growth
In May, Genmin announced that the global mineral resources of the Baniaka project had increased by 168% to reach 700 million tonnes grading 40% iron.
The growth was made possible by an inaugural resource on the Bandjougoy prospect of 436 Mt containing iron ore grading 34.8% iron.
He elevated the project to Gabon’s greatest resource for all commodities.
Baniaka covers 881 square kilometers of land in southeastern Gabon and is home to 12 major prospects.
A prefeasibility study is underway to assess a bulk surface mining operation that would produce approximately 5 million tonnes per annum of iron ore products and a possible expansion to 10Mtpa.