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Fe Limited eyes potential for royalty boost after move by Mineral Resources

Fe Limited, chaired by Tony Sage, has the potential to earn $2 million a year through royalties.

The company also has interests in the Bryah Basin

Fe Limited (ASX:FEL) could be set to benefit from Mineral Resources Ltd's (ASX:MIN) plan to buy Cliffs Asia Pacific Iron Ore's assets in the Yilgarn region of Western Australia.

The three billion capped Mineral Resources has entered into a definitive agreement with Cleveland-Cliffs Inc. (NYSE:CLF) to acquire the assets that were used by its wholly-owned subsidiary, Cliffs Asia Pacific Iron Ore Pty Ltd, to run its Koolyanobbing iron ore operation.

Where Fe Limited fits in is that it receives royalties in relation to mining conducted by Cliffs Asia Pacific Iron Ore Pty Ltd at its Deception iron ore mine on Cliffs M77/1259.

Previously, Cliffs made the decision to move out of Australia and therefore was mining suspended at Deception Hill, and the royalty stopped.

Now Fe Limited are hopeful that mining will recommence and its royalty stream starts again.

Royalty details

Fe Limited holds a 1.5% dry metric tonne, FOB royalty over two tenements (E77/1322 and M77/1259) within the Evanston Project, registered to Black Oak Minerals Limited.

Cliffs Asia Pacific Iron Ore Pty Ltd previously held these tenements but sold them to Black Oak and provided a Deed of Assignment and Assumption pursuant to the Evanston Iron Ore Rights Deed to Fe Limited assigning the obligation to pay the associated royalty from Cliffs to BOK.

The tenements are 20 kilometres north of the Windarling mine.

Exposure to exploration success near DeGrussa

Fe Limited has exposure to drilling in the Bryah Basin region of Western Australia.

Sandfire Resources NL (ASX:SFR) is involved in a farm-in with Auris Minerals Ltd (ASX:AUR) and Fe Limited at the Morck’s Well Project.

READ: Fe Limited's farm-in partner Sandfire Resources NL hits high-grade copper

Quick facts: Fe Limited

Price: 0.024 AUD

Market: ASX
Market Cap: $11.74 m

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