Loan terms

Genmin (ASX:GEN) Reaches Royalty Agreement with Anglo American on Baniaka Project, Gabon – The Market Herald

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  • Genmin (GEN) Reaches Royalty Agreement with Global Mining Company Anglo American on the Baniaka Iron Ore Project in Gabon, Central Africa
  • Anglo American will pay Genmin US$10 million for a 1% royalty on sales of the first 75 million tonnes of iron ore products to be produced and sold from Baniaka
  • In addition, Genmin and Anglo American plan to negotiate a potential financing agreement of US$75 million for Baniaka and an offtake agreement for iron ore from the project.
  • Genmin CEO Joe Ariti says Anglo American is an ideal potential partner for the company to achieve its goal of pioneering iron ore production in Gabon in a sustainable way
  • Genmin shares are up 5% at 21 cents per share at 10:22 a.m. AEST

Genmin (GEN) has entered into a royalty agreement with Anglo American’s subsidiary, Anglo American Marketing, on the Baniaka iron ore project in Gabon, Central Africa.

As part of the agreement, Anglo American will pay Genmin subsidiary Gabon Iron Ore (GIOL) $10 million (A$14.7 million) to receive a 1% royalty on the first 75 million tonnes of iron ore products to be produced and sold from Baniaka.

Genmin will have the right to redeem the royalty at any time at an agreed internal rate of return (IRR) on the initial cash payment from Anglo.

In addition, GIOL and Anglo American also plan to negotiate a potential financing agreement of US$75 million for Baniaka and an offtake agreement for iron ore from the project.

Genmin CEO Joe Ariti said Anglo American was an ideal potential partner for the company to achieve its goal of pioneering iron ore production in Gabon in a sustainable way.

“The consideration of US$10 million does not dilute our existing shareholders and will immediately increase our cash position,” Mr. Ariti said.

“The agreement provides a mechanism to negotiate and agree on a medium-term potential development finance and a long-term levy solution.

“This agreement also supports our near-term production aspirations and, unlike conventional debt financing, the potential bespoke financing with drawdown enables alignment between the parties for the pursuit of scale.”

GIOL will grant Anglo American an exclusivity period of 120 calendar days from delivery of the Baniaka Preliminary Feasibility Study (PFS) to conduct confirmatory due diligence prior to financing and off-take agreements.

Genmin said it expects to deliver the Baniaka PFS by the end of the September quarter.

Genmin shares rose 5% to 21 cents per share at 10:22 a.m. AEST.