Mindax signs binding agreement with Perpetual

Mindax says it is a step closer towards developing its Mt Forrest iron ore project on the back of a binding joint venture agreement worth up to $52 million with Hong Kong-based investment company Perpetual Mining. 

Perpetual will acquire 51 per cent of Mindax subsidiary Yilgiron, which will become the joint venture vehicle for the Mt Forrest project, for a consideration of $52.3 million, subject to regulatory and shareholder approvals.

There will be an initial payment of $8.3 million on subscription, with a further $10 million paid to fund operating expenses and completion of a feasibility study and the balance paid to fund development of the mine.

The balance of the subscription price will only be paid if the joint venture can secure port capacity and access to ship iron ore.

Mindax, through its membership of the Yilgarn Iron Producers Association, has pushed for an expansion of port facilities at Esperance to enable iron ore explorers in the Yilgarn region to move to production.

The port authority announced in June that two private consortia - a joint venture between Brookfield Infrastructure Australia and Qube Bulk, and the Yilgarn Esperance Solution (YES) consortium, made up of McConnell Dowell Constructors, Asciano and Marubeni Corporation - had been shortlisted to tender for the design, finance, construction and operation of a new multi-user iron ore facility at Esperance Port.

Yilgiron will be controlled by Perpetual from the outset but both Perpetual and Mindax will contribute two board members each.

"In extraordinary times, we have felt the need to be innovative in planning our future," Mindax managing director Steve Ward said.

"This agreement secures the way forward for the Mt Forrest project, provides funding for our other activities, rewards our existing shareholders and creates potential to imporve our share trading liquidity."

Allion Legal acted as legal advisor to Perpetual, with Perth-based Allion principal Simon Rear as the lead partner on the transaction. Williams and Hughes acted for Mindax.

Mindax shares were steady at 8.6 cents at 1:10PM WST.