PERTH (miningweekly.com) – Junior iron-ore company BC Iron has entered into a joint venture (JV) agreement with fellow-listed Kalium Lakes over the Carnegie potash project, in Western Australia.

Under the terms of the agreement, BC Iron could earn a 50% interest in the Carnegie project by predominantly sole funding exploration and development expenditure across several stages, up to the completion of a feasibility study.

In the initial scoping study, BC Iron can earn a 30% interest in the project by sole funding the first A$1.5-million expenditure. To earn a further 10% interest, it would be required to fund prefeasibility studies, requiring a further capital investment of A$3.5-million.

During the feasibility study phase, BC Iron could elect to earn a further 10% interest in the Carnegie project by sole-funding a further A$5.5-million.

“Through this agreement with Kalium, BC Iron has gained exposure to a highly prospective project in an agricultural commodity with attractive long-term dynamics,” said BC Iron MD Alwyn Vorster.

“Becoming involved in an agricultural commodity has been a clearly articulated objective of BC Iron and this JV agreement with an expert potash company, in Kalium, provides us with the required exposure at low risk. This move into potash, added to the pending conclusion of a scoping study on BC Iron’s Mardie Salt project, positions BC Iron well in agricultural and other commodities leveraged to a growing global population.”

The Carnegie project comprises one granted exploration licence and two exploration licence applications covering some 1 700 km². The project is thought to be highly prospective for hosting a large subsurface brine deposit, which could be developed into a solar evaporation and processing operation that produces sulphate of potash.

Further strengthening the cooperation agreement, BC Iron has also given Kalium the right to acquire a 50% interest in the Mardie project, at certain development stages.

BC Iron is hoping to develop a three-million-tonne-a-year solar evaporation salt operation at Mardie.

BC Iron in October 2016 sold its 75% stake in the Nullagine iron-ore project to JV partner Fortescue Metals for A$1, as the restart of the mine remained unlikely.