Fe Limited says it has executed a letter of intent (LOI) with Big Yellow that could see the emerging company become the mining contractor for the JWD iron ore project in the Pilbara of Western Australia.
A full form contract is targeted to be completed within the next 30 days, subject to receipt of necessary environmental approvals and logistic contracts. This LOI, the company says, will enable Big Yellow to allocate the necessary mining fleet and people to the FEL project.
Big Yellow is a new contractor founded by mining executives Brad Gordon (former CEO of Acacia and Intrepid), David Edwards and Mitch Wallace (both ex MACA).
“FEL believes that Big Yellow’s combination of experienced personnel looking to replicate their past success in a new entity is a good fit with FEL’s own aspirations to do the same and looks forward to continuing to work together,” it said.
Following the LOI being executed by both parties, discussions have commenced on works that can be commenced in advance of final environmental approvals being received.
The approvals received to date allow certain clearing and preparatory works to occur at JWD, along with refurbishment of the existing office facilities on site. These early works will allow a faster ramp-up of operations once the remaining approvals and key contracts are secured, FEL claims.
FEL says it has revisited the JWD geological model and mine plan, with opportunities identified for a reduction in the strip ratio and an improved average iron ore head grade. If successfully implemented, this would have a positive impact on its margins through reduced mining costs and improved pricing as a result of higher-grade products than initially expected, it said.
FEL Executive Chairman, Tony Sage, said: “With mining at Wiluna close to commencing, we are pleased to have advised Big Yellow of our intention to appoint them as our mining contractor. We are well advanced with the final approvals and other key contracts and would anticipate being able to update shareholders on these shortly.”
In September, FEL acquired a 51% interest (including operatorship) in the Gold Valley Iron Ore Mining Rights Agreement over the Wiluna West JWD deposit. The JWD project is part of the wider Wiluna West project, owned by GWR Group. It came with a 10.7 Mt resource grading 63.7% Fe using a 55% Fe cutoff.
FEL classes the project as a low capex, direct shipping ore development, which will produce a high-grade (resource average circa-63.7% Fe), low impurity iron ore. A January 2021 presentation claimed the mining and transport of the first 300,000 t of iron ore is required by September under the iron rights agreement.