Australia's Cyclone Metals and Brazilian miner Vale have signed a non-binding memorandum of understanding to turn the Iron Bear iron ore project in Canada into a mining venture, the Australian Securities Exchange-listed miner said Nov. 15.
The MOU "outlines the key terms for a strategic partnership aimed at advancing the Iron Bear project to Decision to Mine (DTM)," Cyclone Metals said.
The MOU defines a two-phased investment pathway for Vale to earn a controlling interest in Iron Bear, with the first investment comprising a contribution of up to $18 million.
Vale can withdraw from the project during phase one. Upon the completion of phase one, Vale can decide to go ahead with phase two and form a joint venture with Cyclone Metals, in which Vale will take a 30% stake in the envisaged Iron Bear JV.
Vale's stake will increase to 75% when Vale either decides on a DTM or when its total investment in the project reaches $120 million.
"Vale is a powerhouse for the production of ultra clean iron ore products which includes DR pellets and their proprietary cold briquettes. They are an ideal partner for us, and we look forward to leveraging Vale's extensive operational and financial resources to realize the full potential of Iron Bear," Paul Berend, CEO of Cyclone Metals, said.
The Iron Bear project, located near the Provincial border of Newfoundland and Labrador and Quebec, Canada, has estimated iron ore reserves of 16.6 billion mt of 29.3 Fe% grade material.
Production of direct reduction-grade pellets at the project began early September 2024. The DR pellets are key raw materials for direct reduced iron plants.
Platts, part of S&P Global Commodity Insights, assessed the 62% Fe Iron Ore Index at $98.70/dry mt CFR North China on Nov. 14, down $2.25/dmt on the day.
