The Anglo Pacific Group has acquired a 1% gross revenue iron ore royalty from London Mining. The royalty will be earned from the Isua iron ore project located in Greenland after a $30 million investment from Anglo Pacific. The project is slated for production in 2015.
The deal was arranged with London Mining and its wholly owned subsidiary London Mining Greenland. The Isua project bankable feasibility study is considering a 15Mtpa open pit and processing operation with a 15 year initial mine life.
Peter Boycott,the Chairman of Anglo Pacific, said that the acquisition enables Anglo Pacific to strengthen their focus on steel making raw materials and they believe that this will deliver considerable long term revenue growth and cash flows for the group and its shareholders.
Mr Boycott added that Anglo Pacific remains focused on the acquisition of royalties that will enhance the value of our royalty portfolio and will enable the group to capitalize on long term growth in key Asian markets, as well as providing additional diversification in our exposure to key commodities.
There are some clauses to the deal and if London Mining Greenland does not fulfil certain milestones, of which the first is the completion of a Banking Feasibility Study by 31 December 2012 at the latest, Anglo Pacific can demand repayment of the USD30m, which can be satisfied in cash or London Mining shares.