Iron ore miner BC Iron Ltd
(ASX:BCI) says its Nullagine Joint Venture with Fortescue Metals Group Ltd
(ASX:FMG) has secured its first off-take agreements which include US$50 million in pre-payments to be used for project finance.
The off-take agreements are for 20 million tonnes of iron ore to be supplied over the next 8.5 years from the project venturers, BC Iron and Fortescue, and will allow the joint venture project to continue to progress to production in late 2010.
BC Iron says the US$50 million repayments will be used for project development, with the first tranche of US$15 million scheduled to be drawn down in December this year and the rest throughout 2010.
Managing director of BC Iron, Mike Young, says the agreements are consistent with BC Iron’s goal of securing off-take to underpin project finance and the establishment of long-term relationships with its customers.
As a sign of the establishment of a long-term relationship, BC Iron has separately agreed to issue 8 million options to the Hong Kong company.
BC Iron is yet to post a net profit.
