Fe Limited (ASX:FEL) will receive a royalty payment of $211,729 from Mineral Resources Ltd (ASX:MIN) for mining of iron ore at Deception mine within the Koolyanobbing project in Western Australia.
FEL chairman Tony Sage said royalty payments from Deception were expected to increase with the mine coming into full production during the March quarter.
MIN has completed the facilities area with first ore hauled in late March to the Koolyanobbing run-of-mine.
FEL holds a 1.5% dry metric tonne, FOB royalty, the Evanston Iron Ore Royalty, in respect to the mining licence area that is approximately 20 kilometres north of MIN’s Windarling mine.
The Evanston Iron Ore Royalty area is in WA’s Southern Yilgarn Iron Province, about 400 kilometres northeast of Perth.
Sage said that the ongoing royalty payments would help secure FEL’s funding for all of its projects in the foreseeable future.
In its March quarterly report MIN said it was ramping up operations at Koolyanobbing.
During the quarter 1.303 million tonnes of iron ore were produced, up from 560,000 tonnes in the December 2018 quarter when production began.
There were 1.591 million tonnes mined in the quarter, up from 1.167 million in the previous quarter while there was 1.518 million tonnes shipped, up from 292,000 tonnes.
Plans to increase production
MIN said it had achieved its Koolyanobbing target annual run rate of 6 million tonnes of iron ore production and plans had been developed to increase production to 8 million tonnes by the first quarter of FY20.
Mine life is estimated at 5-6 years with potential to extend upon the completion of further drilling and exploratory programs on tenement holdings.
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