Alien Metals Ltd (AIM:UFO, OTC:ASLRF) has been granted an option to increase its direct holding in the Hamersley iron ore project to 90% under a revised agreement.
Alien has executed an option agreement to acquire an additional 39% interest in the Hancock and Brockman direct shipping ore (DSO) iron ore projects, part of the Hamersley iron ore project in the Pilbara region of Western Australia.
Alien, which currently has a 51% direct interest in the projects, said the revised arrangement replaces a May 2021 agreement. Under the earlier agreement, Alien would have acquired 80% of Windfield Metals Pty Ltd, which holds 49% of the projects, giving Alien an indirect 90% interest in the projects.
"The execution of the revised binding option agreement with Windfield is a key milestone in the development of both the Hancock and Brockman iron ore projects, as we can now drive both forward knowing the company has de-risked the projects with the ability to move to a 90% project interest,” said Alien Metals non-executive chairman Dan Smith.
Alien will pay £1.79mln in cash, shares and share warrants to exercise the option.
AIM-traded Alien has an 18-month period to exercise the option, although it said it plans to take action earlier.
It will transfer its interest in the projects to its wholly owned subsidiary, IOCA, which will become the manager of the projects.
"The Iron Ore Company of Australia (IOCA) team is fully focussed on getting the Hancock project into production in the first half of 2023, while exploration work on the highly prospective Brockman and Vivash projects remains ongoing,” said Smith.
The company acquired the Vivash Gorge iron ore project, also in the Pilbara, in May 2022.
READ: Alien Metals enters agreement to buy Vivash Gorge iron ore project in Western Australia