Alchemy Resources Seals Game-Changing Iron Ore Deal with Newcam
Alchemy Resources has entered a binding option agreement with Newcam Minerals, unlocking significant funding and operational expertise for its Bryah Iron Ore projects in Western Australia.
- Newcam to earn 60% interest in Bryah Iron Ore assets
- Alchemy retains 40% free-carried interest until decision to mine
- Initial $500,000 option fee plus $500,000 on option exercise
- Newcam subscribes to 10 million shares at 127% premium
- Maiden drill program at Valley Bore scheduled for December quarter
A Strategic Partnership for Bryah Iron Ore
Alchemy Resources Limited (ASX, ALY) has taken a decisive step forward by executing a binding option agreement with Newcam Minerals Pty Ltd, an experienced iron ore miner, over its Bryah Iron Ore projects in Western Australia. This agreement marks a pivotal moment for Alchemy, providing both immediate capital injection and a pathway to accelerate the development of its iron ore assets.
Under the terms, Newcam can earn a 60% interest in key tenements including the Valley Bore and Old Highway prospects by paying an initial $500,000 option fee and a further $500,000 upon exercising the option. In addition, Newcam will subscribe for 10 million Alchemy shares at $0.025 each, representing a substantial 127% premium to Alchemy’s last traded price. This share placement not only strengthens Alchemy’s balance sheet but also signals strong market validation of its iron ore strategy.
Free-Carried Interest and Operational Control
Alchemy will retain a 40% interest in the Bryah iron ore assets, free carried through to a decision to mine. This arrangement allows Alchemy to benefit from future project upside without immediate capital expenditure, while Newcam assumes operational control upon option exercise. Newcam’s track record includes successfully developing and operating the Mt Gould Iron Ore mine, giving Alchemy access to an experienced mining operator with integrated drilling, mining, and haulage capabilities.
Alchemy plans to immediately commence a maiden drilling program at Valley Bore during the option period, aimed at testing high-grade hematite exposures identified in previous sampling campaigns. These hematite-rich banded iron formations have returned assays up to 65.3% iron, underscoring the quality of the resource potential.
Unlocking Value and Future Prospects
CEO James Wilson described the deal as transformative, highlighting the immediate funding and strategic partnership as a game-changer for the junior explorer. The arrangement not only accelerates exploration and feasibility efforts but also positions Alchemy to participate meaningfully in the project’s future development and potential production.
Looking ahead, the joint venture will focus on advancing mining lease applications and progressing feasibility studies, with a five-year window set for completion. Should Newcam withdraw before feasibility is completed, Alchemy’s interest will revert to a royalty, ensuring ongoing value capture.
This partnership exemplifies how junior miners can leverage strategic alliances to de-risk projects and access operational expertise, potentially enhancing shareholder returns while preserving upside exposure.
Bottom Line?
As drilling commences and Newcam’s due diligence unfolds, Alchemy’s Bryah iron ore story is poised for a critical growth phase.
Questions in the middle?
- Will Newcam exercise the option within the six-month due diligence period?
- What will the maiden drill program at Valley Bore reveal about resource scale and grade?
- How will the market respond to the share placement at a significant premium?
