LONDON: Macarthur Minerals has signed a Memorandum of Understanding (MOU) with Southern Ports Authority which provides a pathway for agreeing a potential access and operating solution for the export of Macarthur’s high grade magnetite iron ore product via the Port of Esperance.

Highlights:

• The Port of Esperance is an established deep water port located south of Macarthur’s Lake Giles Iron Project. It is accessible via an existing rail network and has the capability to handle large ‘Cape’ size iron ore vessels.
• In July 2020, Macarthur received a proposal from Arc Infrastructure for an agreed pathway to develop a Commercial Track Access Agreement for below rail capacity from Lake Giles to the Port of Esperance.
• With high speed throughput design capacity potential, Macarthur’s proposed Helix Dumper rail unloading solution would bring ‘state of the art’ rail unloading technology to the Port of Esperance.
• The MOU with Southern Ports Authority provides a clear pathway that can support the delivery of the Company’s current Feasibility Study and represents a substantial step towards Macarthur securing access to the Port of Esperance and completing a fully contracted route to market for its Lake Giles Iron Project.
• The design of a 300,000 tonne iron ore storage shed by Macarthur;
• The design of a new rail car unloading solution at the Port by Macarthur (presently proposed to be an Australian-first Helix rail car unloading solution and associated tube conveyor) (“Helix Dumper”);
• The approval of the shed and Helix Dumper designs by Southern Ports; and
• The identification of suitable land by Southern Ports for the construction of the shed and Helix Dumper within the Port.

 A conceptual engineering design report was completed by RCR Mining Technologies Pty Ltd in 2020 for the proposed Helix Dumper and, subject to mutually satisfactory engineering design and approval processes for the shed and Helix Dumper being completed (and suitable land being identified by Southern Ports for their construction), the parties intend to commence good faith negotiations on the terms of binding commercial agreements which will be necessary for Macarthur to:

· Construct, operate and maintain the shed and Helix Dumper; and

· Access the Berth 3 ship loader at the Port.

Any binding commercial agreements in relation to the shed, Helix Dumper and ship loader access will be conditional upon agreed milestones being met by Macarthur (including financing for its Lake Giles Iron Project).

Southern Ports is presently undertaking a broader master planning process at the Port of Esperance, and Macarthur’s access and operating solution will need to align with Southern Port’s master-planning objectives.

The MOU provides optionality for Southern Ports to broaden access to any un-utilised capacity in the Helix Dumper for the benefit of other Port users by examining the potential for a hybrid design that may allow the Helix Dumper to “dual function” with bottom-dump rail wagon capability.

Examination of these options has the potential to deliver increased business through the Port and benefit both the Esperance community and the Western Australian economy.

The pathway process in the MOU is intended to align with the completion of Macarthur’s Feasibility Study for the Lake Giles Iron Project during the current calendar year so that the Company can target commencement of first shipment of iron ore from Lake Giles in Q1 2024.

Andrew Bruton, Chief Executive Officer of Macarthur Minerals commented: “The MOU with Southern Ports Authority represents a substantial step towards Macarthur securing eventual access to the Port of Esperance and completing a fully contracted route to market for the Lake Giles Iron Project.

The Company’s innovative proposal for the development of on-port infrastructure at Esperance has the potential to deliver an export solution at the Port within a timeframe to meet the development objectives for Macarthur’s Lake Giles Iron Project, and Macarthur is committed to working diligently with Southern Ports towards ensuring that any agreed infrastructure model can be supported by a workable operating solution that will meet the requirements of the Port.

The MOU with Southern Ports provides a clear pathway that can support the delivery of the Company’s current Feasibility Study and it is the next critical piece of the route to market infrastructure puzzle following Macarthur’s announcement last year that it had received a proposal for an agreed pathway to develop a Commercial Track Access Agreement for below rail capacity from Lake Giles to the Port of Esperance.

We are very pleased to be working collaboratively with the team at Southern Ports Authority to achieve an outcome that will underpin long term jobs in the Esperance and Goldfields regions of Western Australia. With a clear framework in place, we now have a process to accelerate our engagement as Macarthur aims to deliver new iron ore business through the Port.”

As a result of dilutions Cadence now holds approximately 1% of the issued equity interest in Macarthur, which is an Australian mining exploration company focused primarily on iron ore, nickel, lithium and gold in Western Australia. It also has a lithium project in Nevada, USA.

www.macarthurminerals.com