EMERGING WA company FairStar Resources has secured US$260 million from a mystery backer for its Steeple Hill iron ore project in WA’s goldfields.
The unknown investor will fund 80 per cent of the project through Alliance Super Holdings, and carry the project through to production with an equal 50 per cent joint venture.
The money will allow FairStar to fund infrastructure, begin construction and commission a plant at the project.
Additionally, the deal will allow a line of credit totalling $640 million above the funding as extra capital for the joint venture.
FairStar managing director Kevin Robertson said the company has considered all options and decided the deal was the best choice.
“The future prospects for FairStar have never looked better and this agreement means the company can retire debt and will emerge debt free, while the 50/50 profit sharing joint venture will have significant funding at its disposal well and above that required to transition the [project] into production,” he said.
Mr Robertson confirmed that FairStar had been in talks with four companies who expressed interest in funding the remaining 20 per cent, and secure offtake for up to 80 per cent of 20 million tonnes plus 4mt of ultra-fines.
The Steeple Hill project is 110km east of Kalgoorlie.
FairStar has already undertaken rock chip sampling, geological mapping, aero-magnetic survey and drill programs at the site.
Based on a 5 per cent cut-off, Steeple Hill was estimated to contain about 131mt of iron ore.
The first phase of mining will involve low cost recovery, washing and handling of surface high-grade iron ore, from the surface down to 11m, a company statement said.
FairStar is also preparing for JORC resource drilling at the adjacent North Steeple Hill tenement.
Mr Robertson said the full extent of the ore body remains unknown.