Anglo American would receive a 1 per cent net smelter for $US2 million ($2.6 million) over Anax’s production from Whim Creek.

The deal, which may be confirmed in the coming weeks, includes a project funding package of up to $20 million with an initial term of three years.

The proposed funding would go towards early-stage developments, exploration and other financial commitments, as Whim Creek grows its potential for upgrade to a pre-concentrate operation.

The site already includes key infrastructure, including a heap leach pad and ponds which are under repair.

An ASX announcement from Anax stated the intention behind the proposal.

“Anax has previously outlined a clear strategy to acquire, develop and monetise assets that are amenable to the integration of smart sorting and associated technology,” the company, formerly Aurora Minerals, stated.

“Anax is systematically delivering on the strategy and the proposed Anglo American royalty, project funding and offtake transaction is intended to be a key step in this process.”

The Whim Creek project is owned under a joint venture arrangement between Venturex Resources (owner of a 20 per cent stake) and Anax (80 per cent).

In 2018, its mineral resource was estimated to be more than five million tonnes at the Mons Cupri deposit, with a further 1.8 million tonnes at the Salt Creek deposit.

The Whim Creek project is about 120 kilometres south-west of Port Hedland in the Pilbara region.