In return for an immediate US$10 million cash payment Anglo has secured the right to a 1% royalty over production from first 75 million tonnes of ore sold from the 700Mt at 39.3% Baniaka project and exclusive rights to negotiate project funding and offtake agreements for up to $75 million.
If the deal crystalises, Anglo can secure 100% of the offtake from Baniaka.
Genmin has previously reported three memorandums of understanding for offtake with Chinese steelmakers for up to 16Mtpa over three years.
It is unclear how significant the apparent strategic shift to a Western partner is, given China is the world's largest iron ore buyer.
The exclusivity period will commence from delivery of the preliminary feasibility study, and will last for 120 days.
The PFS has been delayed several times and is now expected to be released in late September, meaning a deal could be agreed before the end of the year, just 18 months since Genmin was listed on the ASX.
Genmin has a buyback right on the royalty it can call at any time, with the price based on an agreed return for the initial $10 million payment.
Ariti painted Anglo as the "ideal potential partner" given the Johannesburg- and London-listed concerns' long history in Africa, and its activities as an iron ore producer and marketer globally.
The deal comes amid ongoing turmoil in the African iron ore space with legal battles over the claimed expropriation of iron ore projects in Cameroon and the Republic of Congo by Australians Sundance Resources and Equatorial Resources, and just this week moves by Guinea's military junta to again suspend work on the remote Simandou development.
Described as "some of the planet's finest iron ore", Simandou is owned by Rio Tinto and a Chinese-backed consortium, but the government is reportedly looking to force new partners into the mix.
So far, Gabon hasn't suffered any of those sovereign risk issues, with both Genmin and nickel-focused Apollo Minerals successfully operating in the country.
Genmin upgraded its oxide, magnetite and detrital resources earlier this year, and claims to have the largest JORC resources in Gabon "by a large margin".
Step one for the development is a staged 2-10Mtpa detrital and oxide development, using the existing Trans-Gabon railway to get the ore to port, and hydroelectricity to reduce carbon emissions.
The company ended the March quarter with A$12 million in cash, which Ariti said was sufficient to complete its PFS work.
Genmin shares have traded at about 13-34c since it listed in March 2021, and closed yesterday at 20c, valuing the explorer at $81 million.
