Magnum Mining & Exploration has signed a shareholders' agreement with Middle East for Metallic Industrial (Midmetal) for the development of a Green Pig Iron-making facility in Saudi Arabia.

The partnership makes Magnum a 50% owner of Midmetal through the issuance of half of Midmetal's fully paid ordinary shares.

The Green Pig Iron-making facility, featuring HIsmelt technology, will leverage high-grade magnetite concentrate from Magnum's Buena Vista Iron Project in Nevada, US, and mill waste from steel plants in the Arabian Gulf region.

The innovative use of renewable biochar from Malaysian biomass as the iron reductant positions the project to potentially bypass more costly hydrogen-based methods.

As per the agreed terms, Midmetal's Saudi shareholders have committed to providing half of the development funding, sourced from the Saudi Industrial Development Fund or alternative investors.

Magnum is responsible for the remaining 50%, also in the form of a loan to Midmetal. These loans are expected to be repaid within two years at an agreed interest rate.

Additionally, Magnum is in talks with potential investors to fund the remaining 50% of the project, estimated to have a capital cost of $410m (A$616.89m).

The company also secured two non-binding letters of support from international investors, indicating interest in providing either equity or debt to support the project's financing.

Magnum CEO Neil Goodman said: “The maturing relationship between Magnum and Midmetal has landed on a shared vision of how HIsmelt and our Buena Vista Iron Project can be developed in a strongly economic and sustainable way.

“The pathway forward is starting to crystallise by bringing into focus the opportunities that Midmetal represents. The intimate relationship that a joint shareholding facilitates will ensure the project has the very best chances of commercial success.

“Magnum anticipates the working relationship already established with Midmetal will continue to develop to the advantage of Magnum’s shareholders.”