Alien Metals to lift interest in Hamersley Iron Ore DSO Project above 90%

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Alien Metals Ltd (LON:UFO) said it will increase its interest in the Hamersley Iron Ore Direct Shipping Ore (DSO) project, in the Pilbara region of Western Australia, to over 90%.

The acquisition provides increased flexibility to fund the project via a joint venture, partial sale or spin off, it said.

Alien currently has a 51% direct interest in the project, with the remaining 49% held by Windfield.

Under a share sale agreement, Alien will acquire an 80% interest in Windfield and so take its direct and indirect holding in the project to 90.2%. Alien has agreed to acquire Windfield on the basis that its sole asset will be the interest in the project.

The project consists of exploration licence EL47/3953 Brockman and EL47/3954 Hancock in the iron ore-rich Pilbara region.

READ: Alien Metals says results encouraging from maiden drilling programme on Hancock iron ore project

“The excellent initial assay results we’ve seen from our maiden drilling program on the Hancock licence, recent field work carried out on both licences, and along with the continued surge in demand and price for iron ore, have underscored the rationale for this acquisition,” said Bill Brodie Good, chief executive and technical director of Alien Metals.

“Iron ore has recently broken through the US$200 per tonne barrier, driven largely by global infrastructure demand and stimulus spending as economies look to shake off the COVID-19 economic slump. These factors are showing no sign of slowing as global demand for iron ore continues to rise and we see continued resilience in the price.

“Against this backdrop, we feel this acquisition is highly value accretive for the company and will deliver significant value for shareholders,” he added.

The upfront consideration for the transaction is £60,000 in cash, 200mln shares in Alien Metals and 50mln share purchase warrants, exercisable at 1.65p, Alien Metals said.

In a separate statement, Alien Metals reported a pretax loss of US$1.2mln for 2020, compared with a loss of US$1.0mln the previous year, as the company was able to carry out exploration work on a number of projects even during the Coronavirus pandemic.

“The company entered 2021 with a strong balance sheet and a solid portfolio of advanced exploration assets in Western Australia and Mexico,” the exploration and development company said.

“Despite global challenges attributed to the COVID-19 pandemic, Alien has been able to advance its key projects, Hamersley Iron Ore, Elizabeth Hill and Donovan 2.”

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