Cision PR Newswire
MagIron Achieves Significant Milestone in its Strategy to Restart Plant 4
News provided byMagIron LLC
Jun 30, 2022, 10:28 PM ET
GILBERT, Minn., June 30, 2022 /PRNewswire/ -- MagIron LLC ("MagIron" or the "Company) today announced that it has completed the purchase of selected assets from the receivership estate of Prairie River Minerals, LLC ("PRM") (the "Acquisition"). This follows entry of a court order approving the free and clear sale of PRM assets to MagIron by a State of Minnesota district court judge in the Assignment for the Benefit of Creditors action on May 13, 2022. Under the terms of the Acquisition, MagIron will pay total cash consideration of $2.6 million and assume $6.05 million of debt.
The Acquisition provides MagIron with an attractive portfolio of assets, including a large strategic land package surrounding Plant 4, in-ground mineral rights, plant and equipment fixtures at PRM's processing plants, additional stockpiles of residual iron units, mobile equipment, spare parts, exclusive use of the Jessie Load Out rail facility, useful permits and contracts, and inventory stockpiles of lump iron ore finished product. In addition to significantly de-risking and enhancing the value of MagIron's restart strategy for Plant 4, the acquired assets provide MagIron with the capability to produce iron ore sinter fines and lump ore using PRM's Ultra-High Density Media technology which would accelerate the generation of positive cash flows, subject to market conditions.
The Acquisition will be funded by proceeds raised from the recently issued $5 million secured Convertible Note ("Note"), which will also fund further advancement of preparatory work to support the restart of Plant 4.
Larry Lehtinen, CEO of MagIron said, "We are extremely excited to secure the PRM assets and associated financing commitment. Both transactions mark significant milestones and are a further endorsement of MagIron's strategy to restart Plant 4 and produce high quality, lower carbon iron units which will be critical for the future success and decarbonisation of the US steel industry."
A further update will be provided as and when appropriate.
MagIron was established to support and accelerate the decarbonisation of the steel industry by becoming a key supplier of high quality, low carbon iron units which will be critical for the future success and decarbonisation of the US steel industry. The Company is focused on the restart of Plant 4, a modern, past-producing iron ore concentrator benefiting from over $170 million of prior investment. The facility has previously operated at an annualized run-rate of approximately 2.0 million tonnes per annum ("mtpa") and was designed to expand to 3.0 mtpa relatively quickly and at low capital intensity. Plant 4 is designed to process previously discarded waste materials from historical mining operations and convert it into high grade, low impurity iron ore concentrate. Given the significant historical mining operations across the Mesabi Iron Range in northern Minnesota, there are vast amounts of waste material within close proximity to Plant 4, which are suitable as feedstock to support a multi-decade business plan.
SOURCE MagIron LLC