Legacy Iron Ore (ASX:LCY) has executed a binding right to mine agreement with privately held Bain Global Resources for the Mt Celia Gold Project in Western Australia.
As part of the deal, Bain Global will finance all mining activities up to $10 million, under a deferred payment against a profit-sharing arrangement.
Bain Global will also prepare and transport the stockpiles of economically viable ore to the mill.
The net profits from mining activities will be shared between Legacy and Bain Global in a 75:25 ratio until Legacy recovers $20 million in profit. Once completed, the net profits will be split equally between both companies.
Legacy, which has a market capitalisation of $97.62 million, says this agreement positions Bain Global’s commitment to the project, following its association with the company as mining contractor since October 2023.
CEO Rakesh Gupta says with gold prices at record levels, this partnership allows both companies to optimise the mine’s potential and extend its operational life.
“We welcome Bain Global Resources’ deeper involvement in the project and look forward to leveraging their expertise in mining operations to drive the success of Mt Celia,” Gupta says.
As of 10.30am AEDT today (10 March), gold’s spot price was sitting at $4,643.58 per ounce, as per the ABC Bullion.
Legacy notes after the first three months of operations, Legacy will receive a fixed monthly payment of $300,000 until the project reaches breakeven.
Monthly net profit or loss will be determined by deducting all of the operational costs from revenue. Any remaining surplus after Legacy’s fixed payment will be allocated to Bain Global until it recovers its initial investment.
Legacy Iron Ore is a Perth-based explorer and developer focused on iron ore, gold, and base metal deposits.
Write to Aaliyah Rogan at Mining.com.au
Images: Legacy Iron Ore
