Firebird Metals Ltd (ASX:FRB, OTC:FRBMF) has moved to farm-out three non-core manganese tenements in Western Australia in order to concentrate more fully on the development of the Oakover Project and the company’s Chinese lithium manganese iron phosphate (LMFP) sulphate plant.
The company has executed a farm-out agreement for Macro Metals Ltd (ASX:M4M) to acquire an 80% interest in the Wandanya (E46/1456 and E46/1457), Disraeli (E46/1389) and Midgengadge (E45/5906) manganese tenements with the company retaining exposure to any upside from future development of the tenements.
Macro, which has proven and strong management in the exploration and development of greenfield projects, will invest an initial $150,000 in the first 12 months and undertake a 10-hole reverse circulation (RC) drill program with a minimum of 100 metres drilled on each of the four tenements.
The company will retain a free-carried 20% interest in the projects until a decision to mine and will earn a 1% sales commission based on FOB (Free on Board) revenue.
Leveraging expertise
Firebird managing director Peter Allen said: “This agreement allows Firebird to continue its strategic focus on the Oakover Project and our Chinese LMFP [lithium manganese iron phosphate] strategy.
“By partnering with Macro, we leverage their expertise and resources to drive the development of these tenements, which not only ensures that they receive the necessary investment and development attention but also allows Firebird to benefit from potential production and value growth without immediate capital outlay.
“We are confident that this collaboration will unlock value for our shareholders and look forward to a prosperous collaboration with Macro.”
Macro will assume full responsibility for the tenements over the earn-in period.
Agreement details
Firebird’s 20% interest will be free-carried until such time Macro makes a decision to mine, at which point Macro and Firebird will enter into an incorporated joint venture (SPV).
The SPV will enter into a life of mine, mining services contract with Macro’s wholly-owned, mining services subsidiary, Macro Mining Services Pty Ltd, for the provision of all services across the entire pit to customer supply chain on a commercial, arms’ length schedule of rates.
Firebird retains the ability to transfer its 20% interest into a 1% royalty. The agreement with Macro also allows for Firebird to earn 1% sales commission.
Completion of the transaction is conditional upon due diligence to the absolute satisfaction of Macro and any necessary regulatory or third-party consents or approvals required before the close of business on September 30, 2024 (or such time as otherwise agreed).