The West Australian reported that Cazaly Resources and Vector Resources have lured mining giant Anglo American to help develop their Earaheedy iron ore joint venture project near Wiluna.

Under the terms of the deal, Anglo American will complete an initial proof of concept program with a minimum of 7500 meters of drilling to be completed as due diligence within 18 months.

The mining giant will then be able to earn a 51% stake in the project by paying AUD 1 million to the joint venture partners and spending AUD 20 million on further exploration and development within four years.

The company can then boost its earn in potential to 75% for a further AUD 5 million and the completion of a bankable feasibility study.

A success payment of AUD 45 million would be payable to the joint venture partners after the delivery of a positive bankable feasibility study.

The partners could then elect to contribute to the project or dilute its interest to a 1.25% FOB royalty.

Mr Clive Jones joint MD of Cazaly Resources said the agreement with Anglo American recognised the substantial potential of the Earaheedy project and the need to have a major international mining house as part of its development.

The original Earaheedy partners will retain sole rights to the southern portion of the project area which is also deemed to be highly prospective for manganese mineralisation.

(Sourced from thewest.com.au)