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Atlas Iron Limited (ASX:AGO) has purchased a 90 per cent stake in Gondwana Resources Limited (ASX:GDA) Corunna Downs project for $2.1 million in cash.
Corunna Downs is located halfway between two of Atlas’ projects in Western Australia’s North Pilbara region. Atlas plans to pay for the 90 per cent stake in three stages.
Under the deal Gondwana is to retain a royalty of $1.13 per tonne for all iron ore mined and Atlas will retain a right to buy back the Gondwana royalty for $0.20 per ore reserve tonne.
Gondwana Resources says it pleased to sell its interest as it does not possess the financial resources to develop the prospect alone.
In the 2011 financial year Atlas Iron posted a net profit of $169 million.
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