Monday 8th August 2022 Font size:

Iron ore offtake deal for Norseman Gold Project

Friday, July 1st, 2022

UK-based gold development and mineral exploration company Tulla Resources‘ wholly owned subsidiaries, Central Norseman Gold (CNGC) and Pangolin Resources, have entered into an offtake and funding agreement with Constance Iron (previously known as Koch Metals) for iron ore from the  Norseman Gold Project in Western Australia.

A condition precedent for the agreement to come into full force and effect is the successful completion of the initial public offering (raising at least £56.41 million) and listing of Constance on the London Stock Exchange by September 30, 2022 (or such later date as agreed by the parties).

CNGC and Pangolin will retain ownership to 100 per cent of the rights to the ore and associated iron products at the Norseman Project.

Tulla Resources executive chairman, Kevin Maloney, said this was an important transaction for Tulla.

“While our focus is on the recommencement of the gold operations at Norseman, the agreement with Constance Iron is a key part of the company’s strategic plan to diversify our asset base and unlock value for our shareholders,” he said.

On Constance being admitted to the London Stock Exchange, it will prepay the Tulla parties $20 million cash and either issue £7.5 million in Constance equity at the Constance IPO issue price to the parties or increase the cash consideration by £7.5 million for an initial tranche of 200 million metric dry tonnes of iron ore.

Thereafter, if and to the extent mineral reserves in excess of this 200 million tonnes are identified, Constance will prepay for up to a further four 50-million-tonne tranches based on an agreed price per metric tonne.

The company’s flagship asset commenced operations in 1935, and comprises 152 near continuous mining tenements {including pending applications) over approximately 70 kilometres of strike covering about 750 square kilometres.

The project has produced in excess of 5.5 million ounces of gold since mining began there, and is considered one of the highest-grade, large-scale gold projects in Western Australia.

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