(MENAFN - ProactiveInvestors - Australia) Sherwin Iron (ASX: SHD) has taken a crucial step towards reaching a definitive long-term rail service agreement with Genesee & Wyoming Australia to transport iron ore from its Roper River tenement.
The Memorandum of Understanding defines a framework for the transport of 3 million tonnes of iron ore per annum represents progress towards the company's goal of starting production before the end of this year.
Sherwin believes that the ground work carried out by GWA places the two companies to enter a Rail Haulage Agreement within the next two months.
The agreement, which covers rail haulage and ancillary services, will have a term of at least 10 years.
GWA is a provider of above rail freight services in South Australia and the Northern Territory and owner of the Tarcoola to Darwin railway,
Sherwin's Roper River Iron Ore Project is located about 500 kilometres southeast of Darwin and has total DSO Indicated Resource of 39.5 million tonnes at 57.9% iron and total Indicated and Inferred Resources of 41.1Mt at 57.8% iron.
The company is currently preparing to ship an initial bulk sample of 200,000 tonnes to selected overseas steel mills for relevant metallurgical testing.