- Legacy Iron shares closed 95% higher on Thursday.
- Joint venture partners Legacy Iron and Hawthorn Resources have executed a deal with Hancock for WA based Mt Bevan iron ore project.
- Mt Bevan project has the potential for high-quality magnetite concentrate.
Shares of Legacy Iron Ore Limited (ASX:LCY) closed 95% higher at AU$0.039 per share following the execution of a joint venture deal for WA based iron ore project.
As per the release, Gina Rinehart’s subsidiary - Hancock Magnetite Holdings Pty, will now earn into Legacy Iron and Hawthorn joint venture projects.
JV partners Legacy Iron and Hawthorn Resources Limited (ASX:HAW) have executed all the relevant agreements for the earn-in of Hancock Magnetite into West Australia based Mt Bevan iron ore project.
Legacy Iron currently owns the majority interest in the Mt Bevan project which was historically held in a 60:40 joint venture between LCY and HAW respectively.
Image source: © Willgame | Megapixl.com
In November 2021, both companies announced that Hancock would join them in developing the West Australian Project. Hancock had the exclusive right to earn into the Mt Bevan iron ore project and form a new JV agreement.
As per the executed agreement, Hancock will make an initial investment of AU$9m for a 30% interest in the Project.
Hancock will make an initial investment of AU$9 million for the new joint venture.
It will pay cash of AU$8 million to both the entities - AU$4.8 million to LCY and AU$3.2 million to HAW. However, the remaining AU$1 million will be used as working capital for the new Joint Venture.
LCY and HAW will hold 42% and 28% stake in the Mt Bevan project, respectively, after the AU$9 million payment.
Apart from this, Hancock will need to fund a pre-feasibility study (PFS) to earn an additional 21% in the Project.
After completing PFS, Hancock will hold 51%, Legacy will have 29.4%, and Hawthorn will hold 19.6% of the Project.
Legacy Iron CEO Rakesh Gupta said that this agreement marks a significant step in developing the Mt Bevan project as it moves further towards commercialisation.