Key points:
- Alien Metals (UFO) shares edged lower on news of the MoU by IOCA.
- IOCA signed the MoU to access a port facility to ship the ore produced.
- Investors largely ignored the news, as evidenced by the muted reaction.
The Alien Metals Ltd (LON: UFO) share price edged lower after its Australian subsidiary Iron Ore Company of Australia Pty Ltd (IOCA) signed an MoU to share a bunker with Element 25 Ltd at the Pilbara Ports Authority’s Utah Point export facility.
The Memorandum of Understanding (MoU) will allow IOCA to share Element 25’s existing bunker allocation at Utah Point, providing offsite storage capacity for its Hancock mine in Pilbara, Western Australia.
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The MoU provides an avenue for the two companies to negotiate an agreement for IOCA to access the existing bunker allocation and export capacity at the Pilbara Port Authority’s Utah Point export facility. The company intends to sign a deal that allows it to operate more than one shipment from the port each calendar month.
The deal will allow IOCA to store up to 40,000 tonnes of ore stockpiles offsite making it easy for the company to ship the same to its clients across the globe. In addition, the significant capacity will make it possible for IOCA to quickly deliver more cargo to the site as the existing stockpiles are being loaded onto transport vessels.
The MoU gives Alien Metals access to the ports on an accelerated timeline even as the company continues negotiating with the Pilbara Ports Authority (PPA) to get direct access to the Utah Point Public User Facility at Port Hedland, Western Australia. If successful, the firm would have access to its port facility located 425km from Hancock.
Roderick McIllree, Alien Metals Chairman, commented: “Executing this MOU with E25 is an important step towards unlocking the export capacity required for Hancock. We will continue to work with the Pilbara Ports Authority to obtain an independent export allocation at the Utah Point facility in line with our production profile over time; however, this MOU not only gives us immediate access but also potentially paves the way for IOCA to increase its production capacity through Port Hedland to more than our stated 1.2mt/pa.”
So, would I buy Alien Metals shares? The short answer is yes. However, before buying, I would wait for the shares to rally higher for a few days.
*This is not investment advice.
Alien Metals share price.
The Alien Metals share price was trading sideways as it oscillated between gains and losses.