From London: Shares in Strategic Minerals (LON:SML) were up strongly after signing a supply agreement with Glencore International, the world's largest commodity trader.
At 2pm the shares were changing hands at 11.75 pence each, up 6 per cent, after peaking earlier in the session at 12.25 pence.
Under the terms of the deal, SML will "make available" a total of 800,000 wet metric tonnes of stockpiled magnetite ore.
Initial deliveries will begin next month with a shipment of 60,000 wet metric tonnes.
Austin McKelvie, of City broker Daniel Stewart, said the contract was of "significant importance" to the AIM-listed iron ore specialist.
"Cash flow from the contract will now allow the iron ore producer to pursue opportunistic acquisitions of magnetite stockpiles in both North America and Australia, whilst at the same time developing their exploration projects across Australia," he added.
Earlier, SML chairman Steven Sanders said he was "delighted" to have sealed the long-term agreement with the influential commodities house.
"It demonstrates not only the strength of our business model and our ability to acquire projects that can deliver shareholder value, but also the ability of our management to execute on those projects," he explained.
Indeed, it is a major endorsement of the project and the work carried out to turn Cobre into a commercially attractive venture in a very short space of time.
The key has been the construction of a spur onto the main railroad, which should be complete later this month.
This will allow the magnetite to be transported by train to the Port of Guaymas in Mexico, where it will be unloaded for shipping.
In total, 1.57 million tonnes of magnetite iron ore at an average grade of almost 61 per cent is stockpiled at Cobre, which is owned by mining giant FreeportMcMoran.
It is one of a number of stockpile opportunities open to operationally and financially agile young companies such as SML.
The tie-up with Glencore suggests AIM-listed Strategic has the wherewithal to make the most of these opportunities.
And of course the commodities trader will have carried out its own due diligence on the project to ensure SML can supply the iron ore in the quantities required.
Speaking to Proactive Investors, director Matthew Bonthrone said: "This (agreement with Glencore) is a huge tick in the box for us, for Cobre and hopefully what we can do in future.
"What it says is we can get these projects up and running quickly and very efficiently."
However he wouldn't be drawn on whether the Glencore relationship might extend to future stockpile deals.
Analysts say SML could generate as much as US$30 million in revenue over the 22 months of the project's life, after spending US$3.5 million to rehabilitate a rail spur.
SML's interests span two continents - North America and Australasia - and its strategy ought to, if successful, catapult the group up a division into the mid-caps.
The company's acquisition in August of Ebony Iron for an initial £10 million was transformational.
Ebony's rights to explore on six exploration tenements in the Northern Territory and Western Australia made for a snug fit with the existing Iron Glen magnetite project in Queensland.
Daniel Stewart analyst McKelvie: "Relative to their AIM Iron Ore peer group, Strategic Minerals offers investors a low risk entrée into an iron ore play which is generating cash flow with significant exploration upside with strategically located projects in Australia."