Havilah Resources has agreed to provide GFG Alliance-subsidiary SIMEC Mining additional time to carry out due diligence at two of its iron ore projects, Grants and Maldorky.
The two sites are strategically positioned near GFG’s Whyalla operations and include a continuous link from rail to port.
SIMEC Mining’s exclusivity period will be extended from March 31 to April 30 so that it can reach preliminary conclusions regarding the mines’ potential for commercialisation.
It is the second time the exclusivity period has been extended, following a two-month extension granted to SIMEC Mining at the end of January.
Unlike the previous extension, which resulted in a $1 million payment by SIMEC Mining to Havilah, no payment will be made regarding the latest extension.
SIMEC Mining will also be allowed to deduct the $1 million from further transactions between the two companies in 2019.
Havilah chief executive officer Walter Richards said that while the negotiations between the two companies were now in an advanced state, there was no guarantee the deal would be concluded in the given timeframe.
“SIMEC Mining’s due diligence work is reaching a decision point and the results of its work, in conjunction with the recent drilling results, appear to be positive for the possible commercialisation of Havilah’s iron ore projects,” said Richards.
“Given the current stage of negotiations, a short extension of time will provide both parties the additional time considered necessary to reach a mutually beneficial agreement.”