Dallas, TX/ February 7th, 2022/ Macarthur Minerals Limited
COMPANY DESCRIPTION
Macarthur Minerals engages in the exploration and evaluation of mineral resource properties in Australia and the USA. The company is an iron ore development, and lithium exploration company. It holds interests in three iron ore projects in the Yilgarn region of Western Australia and two in the Pilbara, Western Australia. The Company also holds lithium brine interests in the Railroad Valley, Nevada, the United States. The company was incorporated in 2002 and is headquartered in Brisbane, Australia.
SUMMARY
- Operating in tier 1 mining jurisdiction - Macarthur Minerals operates in Australia, a stable, tier 1 mining investment jurisdiction. The company's Lake Giles Iron Project is in an established mining region with existing iron ore producers located nearby. Importantly, Australia is the world's largest exporter of iron ore products, with Western Australia as the largest iron ore supplier in the world (39% share in 2020). Furthermore, Western Australian iron ore miners are estimated to be among the world's lowest cost seaborne iron ore exporters, driven by the proximity of Western Australian ports to the largest iron ore markets in Asia.
- Flagship project, Lakes Giles - an advanced iron ore asset - The Lake Giles Project is a high-grade magnetite project that is well positioned among established regional iron ore projects. According to Macarthur, the Project's high-grade magnetite concentrate should attract a 65% Fe premium pricing. Global policy shifts targeting net zero-emissions are expected to drive growth in global demand for high-grade iron ore and "green steel". The Project has fully granted mining leases, no native title and cultural heritage issues on mining leases, and environmental approvals are being progressed to align with the development schedule. Lastly, the Project has a 10-year offtake agreement with Glencore for up to 4 Mtpa with an option to extend for an additional 10-years.
- Advanced feasibility study underway - The Company is nearing completion of its Definitive Feasibility study at its Lake Giles Iron Ore Project (Moonshine & Moonshine North deposits). A peer review process and additional value engineering phase is planned for the Q1/Q2 2022 period to ensure that the project fundamentals and economics are optimized ahead of financial close for project finance. Currently, the company is targeting commercial production of high-grade magnetite concentrate in 2025/26.
- Manageable project start up strategy - Given the considerable investment made to date in defining a resource and understanding the technical aspects of the Lake Giles Project, the company's focus is on obtaining a partner to fund the development. The company is in advanced negotiations for access to existing rail and port infrastructure that should provide Macarthur with an export avenue.
- Resource potential - The company's most advanced iron ore projects are located in the Yilgarn region of Western Australia and comprise the Lake Giles Iron Project (a high magnetite concentrate project targeting the Moonshine and Moonshine North deposits) and the Ularring Hematite Project. Exploration at the Lake Giles Iron Project and the Ularring Hematite Project has been sufficient to obtain an estimation of Mineral Resources for both projects. The Lake Giles Iron Project Mineral Resource estimate includes Measured Mineral Resources of ~53.9 Mt @ 30.8% Fe, Indicated Mineral Resources of 218.7 Mt @ 27.5% Fe and Inferred Mineral Resources of 997.0 Mt @ 28.4% Fe. The Ularring Project's Mineral Resources comprise Indicated Mineral Resources of ~54.5 Mt @ 47.2% Fe and ~26.0 Mt @ 45.4% Fe Inferred Mineral Resources. The company plans to target higher grade deposits to support a profitable DSO operation at Ularring.
- Valuation - Comparative companies trade in a range on EV/Resources of about AUD$0.00 to AUD$1.20 with an average and median of AUD$0.19 and AUD$0.06, respectively. This compares to Macarthur Minerals trading at an EV/Resources of AUD$0.04. Macarthur's Lake Giles Iron Project is expected to become one of the most advanced magnetite plays in Western Australia. As the Company has no current debt and growth potential surrounding its high grade (net zero) thematic, we would expect some of the gap to start diminishing as the Company executes its strategy.
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