Hilltown Resources Inc CNSX:HLT and Mineracao Siderurgia Socoimex Ltda announced a joint venture to produce iron ore at the Capanema Iron Mine in Minas Gerais State, Brazil. Hilltown will contribute US$30 million and Socoimex $22 million of the total capital cost. Socoimex will act as project operator of the 50/50 JV.
Socoimex won the bid to acquire the mine from Companhia Vale do Rio Doce NYSE:VALE and produce a minimum of 20 million tonnes of high-grade iron ore (62% Fe) over 13 years. The agreement includes a three-year licensing and development/implementation plan and a 10-year production plan. Scheduled production is set at approximately two million tonnes per year, which may be increased to four million tonnes at Vale´s option. Vale is the largest mining company in Brazil and the second-largest in the world.
Vale will buy 95% of the ore produced at a minimum price of approximately $58 per tonne, with an annual inflation adjustment. Vale will receive a royalty of approximately $32.88 per tonne.
The acquisition of Capanema mineral and production rights by Socoimex will take place by March 1, 2012.
View Company Profile
Hilltown Resources Inc
Rudy de Jonge
Disclaimer: Hilltown Resources Inc is a client of OnPage Media and the principals of OnPage Media may hold shares in Hilltown.
by Greg Klein