MONTREAL, Nov. 25,
2024 /CNW/ - Strategic Resources Inc. (TSXV:
SR) (the "Company" or "Strategic") is pleased to announce that
it has signed definitive agency agreements (the "Offtake
Agreements") with Javelin Global Commodities (SG) PTE Ltd, a
subsidiary of Javelin Global Commodities ("Javelin") to procure
approximately four million tonnes of direct reduction ("High Purity
Iron" or "DR") grade iron ore concentrate and sell up to four
million tonnes a year of DR grade iron pellets from Strategic's
planned High Purity Iron pelletizer facility at Port Saguenay,
Québec (the "Project" or "Plant"). Along with these agreements,
Javelin and Strategic have signed an indicative term sheet for
Javelin to provide a secured working capital facility up to
US$150 million to support the
operations of the Plant.
Sean Cleary, CEO
commented: "These Offtake Agreements solidify our business plan
to move ahead with the four million tonne High Purity Iron pellet
plant at Port Saguenay, Quebec as
Phase 1 of the BlackRock Project. Javelin is an outstanding
long-term partner to work with given their demonstrated track
record in the seaborne iron concentrate and iron pellet markets and
provides another major international sponsor for the Project. The
completion of the Offtake Agreements is a significant milestone for
Strategic and puts the Company in a position to complete the
required next steps over the first three quarters of 2025 as it
works towards the start of construction of the High Purity Iron
Pellet Plant."
Key Terms of the agreements:
- Javelin will be the exclusive agent for the supply of iron
concentrate feed and the marketing of the High Purity Iron ore
pellets.
- A ten-year contract from the completion of construction with an
option for Strategic to terminate, including the right to terminate
after seven years from the commencement of production of the iron
ore products.
- Javelin will be paid a percentage fee on the total cost of the
iron concentrate feed and percentage fee of the revenue from direct
reduction iron pellet sales.
- Javelin will, subject to satisfactory due diligence and
contract, provide a working capital facility of up to US$150 million for the Project for a period of up
to three (3) years.
Other Project Updates
Javelin will work with Strategic, its Feasibility Study
consultant and Metso to provide iron ore concentrate samples from
the selected feed sources for testing. This test work will allow
Metso to optimize the pellet plant and refine the detailed
engineering for the project. It is estimated that the Feasibility
Study and testing will take approximately six months to
complete.
Strategic will continue to have discussions with parties
globally around their interest in funding or partnering on Phase 2
of the Project; the Tenova direct reduction unit at Port Saguenay.
Phase 2 allows for the production of direct reduced iron or hot
briquetted iron, which would ultimately help with the global
transition to electric arc furnaces in the Steel Industry. Phase 2
is permitted and would allow Québec and Canada to capture more of the value in the
global steel supply chain, while helping to reduce global carbon
dioxide emissions.
Construction of the two-way, multiuser conveyor belt at Port
Saguenay is well advanced and on track for completion in 2025. The
1.5 km conveyor system will serve to deliver iron ore concentrate,
and other materials from the wharf to the industrial park at Port
Saguenay. The finished pellets will be transported on the same
conveyor system to the wharf for export. The conveyor project,
which is being funded by the Federal Government of Canada and Province of Québec is expected to
cost approximately C$110 million.
The phased approach of building a 4-million tonne pellet plant
as Phase 1 of the BlackRock Project means
that consumption of natural gas will be significantly lower
compared to the construction of the entire metallurgical facility
planned for Phases 2 and 3. Since the volumes have changed
significantly, the project no longer meets the profitability
requirements established by Énergir's regulator. Therefore, the
existing natural gas distribution contract signed in 2018 between
Énergir and Strategic Resources will be terminated. This enables
Strategic Resources to benefit from the return of C$4.27 million of cash onto its
balance sheet from the letter of credit that had been put in place
in April 2023. This capital will be
used to continue advancing the Phase 1 High
Purity Iron pellet plant project. Taking into account the new
volumes and the profitability required by Énergir's regulator,
a new natural gas distribution contract will have to be
negotiated.
About Javelin
Javelin Global Commodities is a global commodities physical
trading, logistics, operations, financing and investment group
headquartered in the United
Kingdom, engaged across multiple commodities sectors,
including power generation fuel commodities, steel raw material,
oil & gas, metals, steel scrap, hydrocarbons, freight, softs,
and renewables. Founded in 2015, Javelin has grown to become one of
the leading commodity traders in the world and operates globally
with over 180 employees serving the energy, steel and industrial
sectors, with offices in London,
Bangalore, Calgary, Melbourne, New
York and Singapore.
About Strategic Resources
Strategic Resources Inc. (TSXV:SR) is a critical mineral
development company focused on becoming a supplier of green steel
inputs. The Company has a planned metallurgical facility site in
Canada and high-purity iron and
vanadium projects in Canada and
Finland. The Company is developing
its flagship BlackRock Project, which is a fully permitted and
ready to construct mine, concentrator and metallurgical facility
located at a seaport in Québec with full access to the St. Lawrence
Seaway. The Company's Head Office is in Montreal, Québec.
Further details are available on the Company's website
at https://strategic-res.com/. To follow future news releases,
please sign up at https://strategic-res.com/contact/.
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STRATEGIC RESOURCES INC.
Signed: "Sean
Cleary"
Sean
Cleary, CEO & Director
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Cautionary Note Regarding Forward-Looking
Information
Certain statements and information herein, including all
statements that are not historical facts, contain forward-looking
statements and forward-looking information within the meaning of
applicable securities laws. Such forward-looking statements or
information include but are not limited to statements or
information with respect to the size of and completion of a working
capital facility, the supply of approximately 4 million tonnes of
High Purity Iron, the sale of up to 4 million tonnes of direct
reduction pellets, the completion of test work with Metso, the
completion of a Feasibility Study, the completion timing of the
multiuser conveyor and the negotiation of a new contract with
Énergir. Often, but not always, forward-looking statements or
information can be identified by the use of words such as "will" or
"projected" or variations of those words or statements that certain
actions, events or results "will", "could", "are proposed to", "are
planned to", "are expected to" or "are anticipated to" be taken,
occur or be achieved.
Although management of the Company believes that the
assumptions made and the expectations represented by all
forward-looking statements or information are reasonable, there can
be no assurance that a forward-looking statement or information
herein will prove to be accurate. Forward-looking statements and
information by their nature are based on assumptions and involve
known and unknown risks, uncertainties and other factors which may
cause the Company's actual results, performance or achievements, or
industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements or information. These factors include,
but are not limited to: risks associated with the business of the
Company; business and economic conditions in the mining industry
generally; the supply and demand for labour and other project
inputs; changes in commodity prices; changes in interest and
currency exchange rates; risks relating to inaccurate geological
and engineering assumptions (including with respect to the tonnage,
grade and recoverability of reserves and resources); risks relating
to unanticipated operational difficulties (including failure of
equipment or processes to operate in accordance with specifications
or expectations, cost escalation, unavailability of materials and
equipment, government action or delays in the receipt of government
approvals, industrial disturbances or other job action, and
unanticipated events related to health, safety and environmental
matters); risks relating to adverse weather conditions; political
risk and social unrest; changes in general economic conditions or
conditions in the financial markets; and other risk factors as
detailed from time to time in the Company's continuous disclosure
documents filed with Canadian securities administrators. Strategic
does not undertake to update any forward-looking information,
except in accordance with applicable securities laws.
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SOURCE Strategic Resources Inc.
