Max Resource closes acquisition of Florália Hematite Iron Ore Project, Brazil
Max Resource Corp. [TSXV: MAX; OTC Pink: MXROF; FSE: M1D2] reported that it has closed the transaction to purchase a 100% interest in the Florália Hematite Iron Ore Project located 70 km east of the city Belo Horizonte, State of Minas Gerais, Brazil.
The transaction closed pursuant to a mineral right purchase agreement (the APA) entered into with the company’s wholly owned Brazilian subsidiary, Max Resource Brazil Ltd., Jaguar Mining Inc. [TSX: JAG] and Jaguar’s wholly owned Brazilian subsidiary, Mineração Serras Do Oeste Limitada. The transfer of the Florália Hematite Project to Max Brazil was lodged at the Brazilian National Mining Agency (ANM) September 5, 2024.
“The Florália Hematite Iron Ore open pit reveals sizable, sub-horizonal plunging bands of hematite iron ore which appear to extend in all directions. Upon successful exploration and development, with iron ore buyers situated within 20 km, Florália would have a significant transportation cost advantage, as bulk tonnage haulage to a shipping port would not be required,” commented Max CEO, Brett Matich.
“Our Brazilian exploration team has commenced the 2024 program, starting with a drone magnetic survey, channel sampling of roads cutting through the mineralization, and subsequent auger and diamond drilling. I look forward to updating shareholders in the coming weeks,” he concluded.
The Florália Hematite Project is centrally located within a prolific iron ore mining region in Minas Gerais, Brazil’s largest iron ore producing State. Numerous iron ore buyers lie within 20 km of Florália, providing a local ready market requiring minimal transportation, upon successful exploration and development.
In 2023, Jaguar Mining conducted a program consisting of 41 channel samples collected over a 151m accumulated length. This resulted in the definition of a geological target estimated at 2,971,233 m3 to 4,496,333 m3 or 8,052,041 tons to 12,184,160 tons using a density of 2.71 g/cm3 averaging 58% Fe (Pre-Dry Screening).
The Florália Hematite open cut is of significant size consisting of five benches rising to 48m and 160m in width revealing plunging bands of hematite iron ore at the base, and sub-horizontal banding at the top of the open cut and is open in all directions.
The objective is to outline the sub-horizontal footprint and estimated thickness of the mineralization extending beyond the current geological target of 8 to 12mt at 58% Fe (pre-dry screening).
In consideration for the acquisition of the Florália Hematite Project, Max made cash payments of US$300,000 to the Jaguar Entities. Additionally, Max will make following remaining cash payments: US$200,000 within five business following the date six months after the effective date of the APA; and US$200,000 within five business following the date 12 months after the effective date of the APA; US$300,000 within five business following the approval of the Florália mineral right transfer to Max Brazil by the ANM.
In connection with the transaction, the Max Entities and Jaguar Entities entered into a net smelter returns royalty agreement, pursuant to which the Max Entities granted to the Jaguar Entities a production royalty equal to 3.5% of the net smelter returns from the Florália Hematite Project.
The company also has granted 4,000,000 Performance Share Units (PSUs) to certain directors and officers of the company under the company’s omnibus equity incentive compensation plan.
In addition, the company granted a further 2,285,000 PSUs with additional performance criteria for vesting being the recommendation of a further drill program based upon the success of the phase 1 drill program.
Max Resource is advancing the newly discovered district-scale wholly owned Sierra Azul Copper-Silver Project in Colombia and its wholly owned Florália Hematite Iron Ore Project in Brazil.
The Sierra Azul Project sits along the Colombian portion of the world’s largest producing copper belt (Andean belt), with world-class infrastructure and the presence of global majors (Glencore and Chevron). Max has an Earn-In Agreement with Freeport-McMoRan Exploration Corp., a wholly owned affiliate of Freeport-McMoRan Inc. [NYSE: FCX] relating to the Sierra Azul Project. Under the terms of the EIA, Freeport has been granted a two-stage option to acquire up to an 80% ownership interest in the Sierra Azul Project by funding cumulative expenditures of C$50 million and making cash payments to Max of C$1.55 million. Max is the operator of the initial stage. The USD $4.2 million 2024 exploration program for the Sierra Azul Project is funded by Freeport.
The Florália Hematite Iron Ore Project is located 70km SE of Belo Horizonte, Minas Gerais, Brazil’s largest iron ore producing State. Numerous iron ore buyers lie within 20-km of Florália, providing a local ready market requiring minimal transportation, upon successful exploration and development.