Strategic Resources Secures Major Iron Ore Supply Deals and Financing

Overview of the Recent Agreements by Strategic Resources Inc.

Strategic Resources Inc. (TSXV: SR) has announced the conclusion of definitive agency agreements with Javelin Global Commodities to supply approximately four million tonnes of High Purity Iron ore, marking a critical advancement in their ongoing projects. This partnership includes the marketing of high-quality direct reduction (DR) iron pellets from the company's upcoming pelletizer facility planned at Port Saguenay.

Details of the Offtake Agreements

Under these agreements, which are central to Strategic's broader BlackRock Project, Javelin will act as the exclusive agent for the supply of iron concentrate and iron pellets. The contracts span a decade from when construction wraps up, reflecting a robust commitment by both parties to maximize production and sales in a growing market.

Financing Structure

In tandem with the supply agreements, Javelin is set to provide a secured working capital facility of up to US$150 million. This financial backing will greatly facilitate the operational aspects of the forthcoming pelletizing plant.

Strategic CEO's Perspective

Sean Cleary, CEO of Strategic, remarked that these agreements are pivotal for moving forward with their operational plans. With the backing of Javelin, the company is well-positioned to complete critical next steps as it gears up for the construction phase of the project.

Other Crucial Terms and Milestones

Some key terms within the agreements include:

• Exclusivity for Javelin as the agent responsible for iron concentrate supply and pellet sales marketing.
• A ten-year contract lasting from the completion of construction, with a termination option for Strategic after seven years of operations.
• Javelin's fee structure based on the cost of iron concentrate and revenue from iron pellet sales.
• The provision of substantial financing, following due diligence, to secure the operational viability of the project over the next three years.

Future Project Developments

Following these agreements, Javelin will collaborate with Strategic's feasibility study consultants to conduct tests on iron ore samples from selected sources. This testing phase will optimize the pellet plant's design, which is expected to take approximately six months to complete.

Global Partnerships and Funding

Strategic continues to explore partnerships across the globe to secure funding for Phase 2 of their project involving the Tenova direct reduction unit. This phase will promote the production of direct reduced iron, aligning with the industry's shift towards cleaner, more sustainable steel production methods.

Infrastructure Advancements at Port Saguenay

Construction is progressing on a multiuser conveyor belt at Port Saguenay, intended for transporting iron ore and other materials efficiently. Estimated to cost around C$110 million, this conveyor system, funded by the Federal Government and the Province of Québec, will facilitate quick logistics and export of the finished pellets.

Environmental Considerations and Gas Supply

The phased approach allows for reduced natural gas consumption compared to over-ambitious original plans for a larger facility. Although the adjusted project scale necessitated the termination of a previously inked natural gas distribution contract, it is expected that Strategic will recoup over C$4 million from a prior letter of credit. This funding will be vital in maintaining momentum on Phase 1 of the project while negotiations for a new gas agreement are underway.

About Javelin Global Commodities

Javelin is a global player in the commodities trading sector, with specialties in various materials related to power generation and metal industries. Founded in 2015, it has established a notable presence worldwide, with numerous employees supporting key sectors, including energy and steel.

About Strategic Resources Inc.

Strategic Resources Inc. is committed to elevating its position in the green steel inputs supply chain. With ongoing projects in Canada and Finland, particularly the BlackRock Project, Strategic strives to enhance its output capabilities while adhering to environmental stewardship goals.

Frequently Asked Questions

What are the key components of the agreement between Strategic Resources and Javelin?

The agreement includes exclusivity for Javelin to act as the agent for iron concentrate and pellet sales, with significant financial support through a US$150 million capital facility.

How does this agreement benefit Strategic's BlackRock Project?

It reinforces the project's foundation by ensuring a reliable supply of materials and enabling financial support necessary for operational success.

What is the focus of Strategic Resources as a company?

Strategic Resources focuses on developing critical minerals for the steel industry, aiming to support green initiatives within metal production.

Why is the conveyor belt construction significant for Strategic’s operations?

The conveyor belt will enhance the logistics of transporting raw materials and finished products, improving efficiency and reducing operational costs.

What future phases are planned for the BlackRock Project?

Future phases include the development of the direct reduction unit, which will play a key role in producing cleaner, sustainable steel inputs.

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