ASX-listed Cyclone Metals has received a further A$5.17-million from Vale. This is the third tranche of funding under the binding development agreement for the joint advancement of the Iron Bear iron-ore project.

The payment forms part of Vale’s Phase 1 contribution and underscores the major miner’s ongoing commitment to the project, located near Schefferville in Canada.

Cyclone noted that the new funds added to its already strong cash position, boosted recently by the A$14.3-million generated from the sale of its shareholding in European Lithium.

The company’s subsidiary, Iron Block 103 Corporation, currently holds about A$12.6-million earmarked for Iron Bear’s development, while Cyclone’s total cash reserves now stand at A$28.2-million, including A$15.6-million in unallocated funds.

“The payment of the third tranche of funding illustrates the continued confidence that Vale has in the Iron Bear project and the excellent operational progress achieved over the last quarter,” said Cyclone CEO Paul Berend.

“In addition, Cyclone has a very strong cash position, which means that current shareholders are protected from dilution in the foreseeable future.”

The Iron Bear project is Cyclone’s flagship asset and is being advanced under a joint development framework with Vale aimed at unlocking its iron-ore potential.

Under the agreement, Vale will contribute $18-million during Phase 1 of the Iron Bear project to complete a prefeasibility study, undertake a drilling programme to enhance the resource, and conduct environmental baseline studies. Upon completion of Phase 1, Vale has the option to trigger Phase 2, during which it would earn a 30% interest in the Iron Bear joint venture by funding up to $120-million in development activities. These include the bankable feasibility study, environmental-impact assessments, and Impact Benefit Agreements with First Nations. Vale’s ownership could increase to 75% once the second tranche is spent or if it elects to progress the project to a decision to mine. At that stage, Vale may either acquire the remaining 25% interest at fair value or choose to carry Cyclone through to production with no dilution.