Hancock Prospecting is looking to expand its iron ore portfolio by earning into the Mt Bevan project in the Central Yilgarn region of Western Australia.
Through its wholly owned subsidiary, Hancock Magnetite, Hancock will make an initial investment of $9 million to acquire a 30 per cent interest in the project.
By funding the pre-feasibility study (PFS) costs of Mt Bevan, Hancock has the potential to earn an additional 21 per cent interest, resulting in a 51 per cent stake in the project.
Current owners of Mt Bevan, Legacy Iron Ore (60 per cent) and Hawthorn Resources (40 per cent), would hold a 29.4 per cent and 19.6 per cent stake respectively following the completion of the PFS.
Hancock has appointed its subsidiary Atlas Iron to act as the manager of the joint venture (JV).
“The Mt Bevan project is an excellent opportunity for Hancock to further grow its portfolio in the iron ore business with higher grade, lower impurity iron ore products,” Hancock chief executive officer Garry Korte said.
“We look forward to working with the JV partners Legacy and Hawthorn to undertake the work programs and studies necessary to support a final investment decision.”
Legacy chief executive officer Rakesh Gupta said Hancock’s investment marked an important step in solidifying the foundations of Mt Bevan.
“This is our first major step to fulfill our dreams to develop it (Mt Bevan). As you may be aware that the demand of premium high grade iron ore products magnetite has been growing due to its efficiency and ability to reduce the environmental pollution for the steel industry,” Gupta said.
Located 250 kilometres (km) north of Kalgoorlie and 100km west of Leonora in WA, the Mt Bevan project is situated on the large tenement E29/510, which holds 1170 million tonnes of magnetite resource at a grade of 34.9 per cent iron (Fe).
As part of Hancock’s initial $9 million investment, $8 million of cash will be paid to Legacy and Hawthorn in proportion with their interest in the project, with the additional $1 million used as working capital in the JV.
Once the PFS is completed, and the desired outcomes have been established, additional programs will be undertaken with the intention to advance the project into a bankable feasibility study.