IPO Targeted for Early 2025
Goldinvest.de has invested in Max Iron Brazil https://maxironbrazil.com/ pre-IPO. MaxIron is a spin-off of the publicly listed copper company Max Resource (TSXV: MAX), which has a partnership with Freeport. As an independent subsidiary, MaxIron is planned to be listed on the Australian stock exchange through an IPO at the beginning of next year. After a successful transaction, the parent company Max Resource is expected to hold 55% of the shares in the listed iron ore company. Up to 8 million AUD is to be raised during the IPO. All costs (project acquisition, exploration, permits) up to this point are borne by the parent company Max Resource.
For us, MaxIron and its Florália Hematite Iron Ore Project (DSO) in the Brazilian state of Minas Gerais meet all the criteria for a promising early-stage commodity investment: The project is located in the heartland of the Brazilian steel industry in the mining-friendly state of Minas Gerais, just a few kilometers from several steel mills (Vale; Arcellor Mittal). The infrastructure, including roads and rail connections, is well-developed. The iron ore on the project is naturally so high-grade (41 channel samples averaged 58% Fe) that it is suitable for so-called Direct Shipping (DSO) of high-quality oxide (hematite).
“Bulk Sample” Provides Promising Data
The starting point of the discovery was an illegal open-pit mine following road construction work, which MaxIron was later able to use to its advantage. The resulting pit measures 160 by 140 meters and effectively corresponds to a bulk sample of an estimated 200,000 tons that have already been processed locally. The open-pit mine has exposed the hematite horizon extensively in height and width, allowing for very good sampling (see channel samples), the accuracy of which exceeds that of drill holes.
Initially, the project was estimated to have a size of 8 to 12 million tons of hematite. However, through exploration work since September of this year, the MaxIron team has come to the conclusion that the potential of the deposit is significantly larger. According to recent estimates (see Max Resource press release dated November 15, 2024), the Florália Hematite Iron Ore Project has a substantial conceptual resource of 50 to 70 million tons of oxide ore (hematite) and an additional 130 million tons in the non-oxide fraction below. The resource is inferred from road outcrops and geophysical surveys, among other things, and has not yet been proven according to JORC standards. Drilling must now follow, which is set to start over the Christmas period. Compared to gold deposits, significantly fewer drill holes are needed to confirm a resource for this type of iron ore deposit.
The property comes from the portfolio of gold producer Jaguar Mining (TSX: JAG), which itself has no interest in iron ore. MaxIron acquired the project for a payment of 1 million USD (at the time, Jaguar Mining assumed an 8 to 12 million ton project) and will pay a royalty to Jaguar in case of production. According to initial assessments, the deposit does not require stripping of surface soils during mining (i.e., no stripping, the thin gravel cover will be mined along with the ore) and due to the soft material, no blasting (which would require corresponding permits) is necessary. Processing is planned to be done by simple screening, as with comparable projects in the region. This requires no water and produces no waste rock. MaxIron intends to start production within two years with a capacity of 1.5 million tpa. The estimated investment costs are expected to be under 10 million AUD. In our view, the biggest advantage over Australian competitors is that transportation costs are likely to be very low due to the short distances. For Australian producers, on the other hand, transportation often accounts for up to 60 percent of operating costs.
Last but not least, the company has an excellent team (especially on-site) that has already achieved a successful exit in the iron ore sector.
