These allow their newly formed alliance to acquire up to 80% of the projects from private Brazilian company, Bahmex.
Notably, the transaction does not require upfront payments prior to drilling, being based on staged payments and key project milestones.
The Alliance investigated more than 50 South American iron-ore projects, ranging from exploration stage to producing mines, before selecting three projects comprised of 81 tenements located near existing or under construction rail infrastructure, which in turn connects to existing or under construction port facilities.
The projects are located in the Brazilian states of Salvador da Bahia and Minas Gerais, covering 272 square kilometres and 1,064 square kilometres respectively.
Bahmex has identified significant exploration potential for the Caetite concessions based on detailed geological mapping, airborne geophysical data interpretation, ground magnetometric surveys, as well as trenching, sampling, chemical analyses and concentration tests.
Exploration fieldwork will begin at the Caetite Project, with two months of detailed mapping, sampling and logistics preparation undertaken prior to drilling. First pass drilling will aim to confirm the depth extent of the highest priority targets, with up to 2,000 metres to be drilled in each state.
The agreement is a positive for Cleveland as it places it in partnership with BC Iron, a strong mid-tier mining company.
This will de-fray any costs on the path towards iron ore production while minimising the impact on its gold operations.
In addition, the lack of an upfront cost ensures that payments will be made only after satisfactory first pass due diligence, which would include further field work and drilling.
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