Macarthur issues clarification, stock up 70%

Macarthur Minerals Ltd. [MMS-TSXV; MMSDF-OTCQB] shares rallied sharply Friday March 22 after the company moved to clarify certain statements contained in a March 21, 2019 release entitled Macarthur Minerals Signs 10-year iron ore off-take agreement for the Lake Giles Iron Project in Australia with Glencore International AG.

Macarthur said Friday’s news release, which contains the clarification and the retraction of certain statements made in the earlier release, was issued at the request of the Investment Industry Regulatory Organization of Canada (IIROC).

Macarthur Minerals is an iron ore development, gold and lithium exploration company that is focused on bringing to production its Western Australia iron ore projects. They include the Ularring hematite and Moonshine magnetite projects at Lake Giles.

Macarthur shares jumped 70% to 8.5 cents Friday on heavy trading volume of 9.35 million. The shares are currently trading in a 52-week range of $0.02 and $0.055.

The rally came after Macarthur said it issued the March 21, 2019 news release to reveal that it had entered into a material contract with Glencore International, a Swiss commodities trading giant. The company said it regrets any confusion that may have resulted from this press release.

However, it went on to explain that its disclosure (in the March 21 press release) of the value of the iron ore off-take agreement, projected revenue to the company, projected spot price for iron ore during the term of the off-take agreement, and resource estimates and economic forecast of the combined Moonshine Magnetite and Ularring Hematite operation, is inconsistent with NI 43-101 standards of Disclosure.

For example, Macarthur said the news release did not contain the required statements that the scientific and technical information contained in the release had been approved by a “qualified person.”

Also, it explained that the news release did not contain the required cautionary language to reveal that Macarthur has not filed a technical report to support a production decision.

In addition, Macarthur has retracted a number of statements that were made in the March 21 news release.

They include the assertion that a “US$4 billion purchase arrangement ensures the consistent long-term revenue to the company.”

In a separate press release on March 19, 2019, Macarthur announced the issuance of a private placement of up to US$6 million of secured convertible notes. It said proceeds would be used to complete a bankable feasibility study on the Moonshine Magnetite and Ularring deposits. It said the bankable feasibility study would include a 54-hole drill program.

Macarthur owns 100% of the Moonshine Project, which it said contains an inferred and indicated mineral resource of 1,316 million tonnes grading 30.1% Iron (Fe). The Ularring Project contains an indicated resource of 54.46 million tonnes at 47.2% Fe and an inferred resource of 25.99 million tonnes grading 45.5% Fe. The company said it has invested over $60 million in the two projects.