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Anax Metals signs funding agreement with Anglo American

Published by , Editor
Global Mining Review,

Anax Metals Ltd has entered into a non-binding agreement with Anglo American Marketing Ltd to fund the development of the Whim Creek Project.

The agreement comprises a US$2 million (AU$2.6 million) royalty agreement for a 1% net smelter return (NSR) from the Anax production (80%) from Whim Creek. The proposed payment would provide Anax with further capital for early-stage development activities, exploration, and capacity to assess further opportunities under the Anax strategy.

The agreement also includes a proposed project funding package of up to US$20 million (AU$26 million) for the pre-production capital and other financial commitments required to develop the Whim Creek mine and associated infrastructure. The development will include the refurbishment of existing site infrastructure, installation of new ore sorting and gravity separation circuits, and heap leach equipment.

The next stage is for Anax and Anglo American to work towards formal binding documentation. This is currently underway and is expected to complete in the coming weeks.

The non-binding term sheet provides the following key terms:

  • Indicative terms – Royalty:
    • 1% NSR over Anax production (80%) of Cu, Zn, Pb concentrates, and Cu cathode for the life of mine.
    • Anglo American to pay Anax US$2 million for the grant of the royalty.
  • Indicative terms – Project Funding:
    • Facility term: 36 months.
    • Facility amount: Up to US$20 million.
    • Upfront fee: 2% of financing amount.
    • Interest rate: 6% per year.
  • Indicative terms – Offtake:
    • Anglo American has the right to offtake all or any of Anax’s share of the materials from the project.
    • Offtake pricing: To be determined by reference to the average market rate at the time of offtake.

Investors are cautioned that the conditions of the terms sheet with Anglo American are non-binding at this stage and there is no guarantee that the parties will enter into legally binding documentation.

Anax has previously outlined a clear strategy to acquire, develop, and monetise assets that are amenable to the integration of smart sorting and associated technology. Anax is systematically delivering on the strategy and the proposed Anglo American royalty, project funding, and offtake transaction is intended to be a key step in this process. The transaction is an endorsement of the strategy to unlock asset value through technology integration and Anax is focussed on expanding the company’s project portfolio using this strategy and important partnerships established to date.

Commodity marketing advisory company, Conrad Partners, helped facilitate the agreement and continues to be a key advisor to Anax.

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Australian mining news Anglo American news Copper mining news