(Alliance News) - Alien Metals Ltd said Friday it has signed an agreement to acquire a 51% interest in each of two iron ore projects in Pilbara, Western Australia.
Shares in the mineral exploration company were 20% higher at 0.17 pence on Friday.
The binding option agreement signed with Australian miner Windfield Metals Pty Ltd will give Alien Metals a 51% interest each in the Hancock Ranges iron ore project and the Brockman iron ore project.
Alien Metals will first pay an AUD25,000, or GBP13,552 non-refundable option fee, granting the company a 45-day exclusive option over the licences.
Following due diligence and exercising the option, the company will then issue 200.0 million Alien Metals shares at 0.11p per share, 66.7 million warrants exercisable to the 80% premium to the issue price.
Alien Metals will pay a further GBP100,000 12 months after the completed acquisition, and issue 100.0 million shares at the same 0.11p each based on performance milestones.
The Hancock Ranges project currently has an inferred and indicated mineral resource estimate of 124.0 million tonnes, at a grade of 60% iron ore.
Meanwhile, the Brockman project has remained underexplored for iron mineralisation, though the area is dominated by the Brockman iron formation.
"This is an extremely exciting opportunity for the company. Over the last six months the board has been reviewing a range of potential opportunities and these projects are surrounded by major iron ore mines owned by global mining companies and there has already been significant interest in these projects given their prospectivity and resurging iron ore price," said Chair Dam Smith.
"This represents a real opportunity for the company to unlock shareholder value as iron ore focused companies have delivered significant returns to investors this year. We are excited to commence fieldwork in the fourth quarter of 2019 and will update the market on our progress in this regard," Smith added.
Alien Metals (UFO)