From Legacy:A subsidiary of Gina Rinehart’s Hancock Prospecting...

From Legacy:

A subsidiary of Gina Rinehart’s Hancock Prospecting will shell out an initial $9m to earn into the ‘Mt Bevan’ iron ore project, owned by Hawthorn Resources and Legacy Minerals (LCY 60%, HAW 40%).

Mt Bevan hosts a 1,170 million tonne magnetite resource @ 34.9% iron, 250km north of Kalgoorlie in WA.

While magnetite iron ore resources are lower grade than hematite in the ground, they can be concentrated into a higher-grade product.

Premiums for high-grade iron ore are increasing, partly because they generate steel with more efficiency.

That could only increase in the future with new tech, like green steel and hydrogen based direct reduced iron, expected to be reliant on higher-grade ores.

Hancock will make an initial investment of $9m to earn a 30% interest in Mt Bevan, with $8m cash being paid to Legacy and Hawthorn in proportion to their interest in the project (Legacy $4.8m and Hawthorn $3.2m).

The remaining $1m will be working capital.

Hancock will hold a 30% interest, LCY will hold 42% and HAW will hold 28% upon completion of the initial investment.

Hancock can earn an additional 21% by funding the completion of a pre-feasibility study (PFS), a detailed look at whether the project is economic to build.

The demand of premium high grade iron ore products from magnetite has been growing due to its efficiency and ability to reduce the environmental pollution for the steel industry, Legacy chief exec Rakesh Gupta says.

“I am highly confident that with the support of our parent company NMDC Limited (A Government of India Enterprise), Hancock Prospecting Pty Ltd and Hawthorn, this Project would be successfully developed and would bring a social- and economic boost to regional Yilgarn province, WA and ultimately Australia,” he says.

Hawthorn managing director Mark Kerr called it a transformational deal for shareholders.

“Hawthorn is delighted to see Hancock join us to expedite development of our top-quality iron ore project,” he says. “All steel mills favour high-grade ore as they seek to reduce emissions going forward.”

Legacy HC site is a lot more active than Hawthorn!