Stokes stocks up on iron ore junior Sarah-Jane Tasker From: The Australian February 18, 2010 12:00AM Increase
KERRY Stokes has injected $7 million into his West Australian iron ore play, and mining giant Rio Tinto has hired experts to assess the junior's flagship project.
Mr Stokes's investment vehicle, Wroxby, has exercised 7 million $1 share options in Iron Ore Holdings, taking his stake in the emerging miner to more than 53 per cent. Shares in the company fell 2.09 per cent to $2.34 yesterday.
The options are believed to have had another year to run, and the purchase is an indication of Mr Stokes's confidence in the company and its ties to Rio Tinto.
Rio last year signed an exclusive agreement to examine IOH's Iron Valley deposit, about 10km from Rio's Yandicoogina operation, possibly leading to a part or full purchase of the lease covering the deposit.
IOH, in an update on its projects on Friday, said it and Rio Tinto had both independently appointed an international accounting firm to assist with the acquisition process for the Iron Valley project.
The junior said both firms had appointed a technical expert to assist them with the process and would in due course begin work on an acquisition agreement.
The company also said it had recommenced drilling at Iron Valley to extend the resource base and had opened an extensive data room on the asset.
It is understood IOH will use Mr Stokes's $7m to continue its drilling program to prove up the resources at its projects.
Analysts say Rio may make a play for the junior once it has completed due diligence on the Iron Valley agreement. IOH had also previously struck a deal with Rio that enables the minegate sale of ore from IOH's Phil's Creek deposit to Rio.
Link Provided: www.theaustralian.com.au/business/city-beat/stokes...
from moneypenny on TS
IOH Price at posting:
$2.31 Sentiment: Hold Disclosure: Held
