Fe Limited (ASX: FEL) has signed a conditional term sheet to sell its Gympie Eldorado gold mine in southeast Queensland to a Singapore based private Mining and Metals trading company for $250,000 in cash.
The company will receive a net smelter royalty on gold recovered from the mine and tailings as well as 10% of profits on any subsequent sale of freehold land.
It will also receive about $2.2 million from the release of environmental performance bonds after settlement occurs.
The sale covers mining leases that contain three tailings storage facilities covering about 22 hectares and associated remaining assets and infrastructure at the mine, which was closed in late 2008.
Completion of the Transaction is conditional on the Purchaser completing technical and legal due diligence.
Following completion of the Transaction, the company intends to focus on near term exploration of the Mt Ida Iron Ore Project in the Yilgarn Iron Province of Western Australia, including first pass drilling to test outcropping mineralisation with a focus on direct shipping grade hematite targets.
Mt Ida is about 80 kilometres northwest of the operational railway at Menzies, which offers access to existing port facilities at Esperance.
Esperance port is proposing an upgrade of facilities to increase capacity by about 10 million tonnes per annum by mid-2015.
The Project comprises the rights to explore and mine for iron ore on a group of 71 licences covering about 370 square kilometres in the emerging Yilgarn Iron Province.
The principal targets are located on licences E29/561 and E29/644 where the company holds 100% and 85% respectively of the rights to explore for and mine iron ore.
These tenements are prospective for detrital and in-situ DSO iron mineralisation, especially in the hanging-wall and at cross fault / BIF unit intersections, and for large magnetite BIF deposits.
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