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(Sharecast News) - Minerals explorer and developer Alien Metals announced on Wednesday that its subsidiary, Iron Ore Company of Australia (IOCA), has chosen Regroup Australia as its primary contractor.
The AIM-traded firm said Regroup would be responsible for the construction, mining operations, and haulage activities at the Hancock Iron Ore Project, located in Western Australia's Pilbara region.
Over the last six months, IOCA had launched a comprehensive market engagement to pinpoint contractors proficient in both commercial and technical capacities for the Hancock project.
The company said the selection process involved bids from pre-qualified contenders who agreed to certain commercial terms and specified work scopes.
It said Regroup has experience in civil construction, mining operations, and haulage, with a history of successfully managing projects surpassing AUD 100m (£50.76m).
The firm boasts one of Western Australia's largest privately and independently owned fleets, serving clients including Newcrest Mining, Roy Hill, and Element 25.
Alien said the association with Regroup would further assist it in refining its financial projections for the ongoing definitive feasibility study.
Looking at the details of the agreement, Alien said Regroup would oversee the construction of the intersection at the Great Northern Highway within the project's territory.
Additionally, it would build an access path leading from the highway to the mining site.
As the primary operations contractor, Regroup's responsibilities would extend to mining services, encompassing potential drilling and blasting activities.
They would also manage the haulage of ore from the mine site to Port Hedland.
Financially, the company said Regroup's bid indicated potential capital savings in comparison to the preliminary scoping study.
It said the bid was in line with the scoping study's estimates, aiming for a direct production cost of around $60 per tonne.
Alien Metals said finalisation of the contract remained contingent on the positive outcome of the definitive feasibility study, as well as requisite approvals, secured funding, and the board's final investment verdict.
"Securing Regroup as a key contractor for the Hancock Project is a significant milestone for the company as it further de-risks the project," said chief executive officer Troy Whittaker.
"This is the first step in locking in relationships with contractors on the back of the IOCA sourcing process, securing competitive pricing from contractors, which moves planning for the project forward.
"We are excited to partner with Regroup, a company that shares our values."
Whittaker said Regroup had set the goal of becoming carbon neutral through the use of a fully battery-powered fleet, and the use of solar and wind to help power its sites.
"That combined with their commitment to advancing indigenous businesses, notably through the championing of Maramara in Western Australia, a majority indigenous-owned limited company, is one of the reasons why we teamed up with Regroup."
At 1338 BST, shares in Alien Metals were down 0.33% at 0.19p.
Reporting by Josh White for Sharecast.com.
