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Exploration and development company Alien Metals has entered into a mandate letter with Anglo American, giving the diversified major an exclusive right to negotiate project funding and offtake arrangements for the Hancock iron-ore project, in Western Australia.

Alien subsidiary Iron Ore Company of Australia will negotiate with Anglo American, which currently operates iron-ore mines in South Africa and Brazil, for up to $15-million in funding and 100% offtake from the project.

“We are really pleased to have signed this mandate letter with a leading global mining company of Anglo American’s stature,” said CEO Bill Brodie Good.

He said the mandate letter supported the group’s near-term production aspirations and, unlike conventional debt finance, the potential funding with offtake provided alignment between the parties for the pursuit of scale across multiple assets with a world-class counterparty.

The board is assessing development plans at Hancock which may reduce the initial capex requirement, estimated to be about $30-million, as outlined in the October 2021 scoping study.

Initial life-of-mine studies show the resource at Hancock will sustain an eight-year life, based on a mining rate of 1.25-million tonnes a year.