KUALA LUMPUR (Oct 13): Selangor Dredging Bhd's 30.99%-owned indirect Singapore-listed associate Fortress Minerals Ltd's subsidiary Fortress Resources Pte Ltd (FRPL) has entered into a new 15-month offtake agreement for iron ore with a third-party domestic steel mill (DSM) in Malaysia under a deal in which FRPL will deliver to DSM approximately 375,000 wet metric tonnes (WMT) of iron ore from Monday (Oct 11, 2021) to Dec 31, 2022.

In an announcement to the Singapore Exchange on Tuesday (Oct 12), Fortress Minerals said the new agreement, which was signed on Tuesday, would provide recurrent income and cash flows to Fortress Minerals and strengthen its financial position.

"The sales volume commitment of approximately 375,000 WMT is a testament to the consistent demand for the group's high-grade iron ore concentrate, efficient business operations, and strong business relationships with its customers.

"The new agreement would hence ensure that the group remains well placed to execute its growth plans and to provide long-term value to its shareholders," Fortress Minerals said.

Fortress Minerals, however, did not specify the name of the DSM in Malaysia.

According to Fortress Minerals, its Tuesday filing follows the company's announcement on Oct 7, 2020 in relation to FRPL and the DSM's previous agreement under which FRPL agreed to deliver to the DSM approximately 400,000 WMT from Sept 1, 2020 to Aug 31, 2021.

Selangor Dredging via its 100%-owned subsidiary SDB Mining Sdn Bhd owned a 30.99% stake in Fortress Minerals as at May 10, 2021, according to Fortress Minerals' latest annual report.

Fortress Minerals' website indicated that the company was awarded mining rights at the Bukit Besi Mine in Dungun, Terengganu in 2016.

Commercial production of iron ore by Fortress Minerals at the Bukit Besi Mine began in April 2018, the company said.

As at 3.27pm on Bursa Malaysia on Wednesday (Oct 13), property developer Selangor Dredging's share price rose 1.5 sen or 2.44% to 63 sen for a market value of about RM268.46 million based on the company's 426.13 million issued shares.

Selangor Dredging's latest reported net assets per share stood at RM2.01.

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