Hawsons Iron has acquired the full stake in its namesake iron ore project in New South Wales after purchasing the remaining 6.04 per cent interest owned by Starlight Investment Company.
Worth $10 million, the transaction strongly positions Hawsons Iron as it prepares its bankable feasibility study (BFS), set for release by the end of 2022.
“This is another significant milestone for the company and all of its shareholders as we now have full control and ownership of the project – allowing us to, among other things, manage the BFS and the project build, more efficiently and effectively,” Hawsons Iron executive chairman Bryan Granzien said.
“No doubt, removing this potential complication at the joint venture level, opens all avenues for the company to move forward, including the consideration of high-quality joint venture partners later if, or when, we wish to.
“We see this as a strategically important transaction as it really paves the pathway for the future.”
Granzien said Starlight had failed to meet its share of the joint venture’s cash calls since November 2021. This prompted a buy-out offer from Hawsons Iron.
“The $10-million sale price really represents a full reimbursement of their contributed capital, as well as a modest premium which partly recognises potential upside value foregone,” he said.
“Starlight has not been paying their cash calls which we are paying and will have to continue to, so this does involve some additional cost, but we see the true value as significantly more than the $10 million we are paying.”
Hawsons Iron has achieved several important milestones in the past 12 months, with full ownership complemented by a $35.6 million capital raise and a 400-million-tonne resource upgrade.
The company signed an equity funding agreement with LDA Capital in December 2021. As part of this deal, Hawsons Iron can draw down up to $200 million by issuing ordinary Hawsons Iron shares to the US investment group.
In February, the company expanded the scope of the Hawsons Iron project to include an option with a potential production capacity of 20 million tonnes per annum (Mtpa), an extra 10Mtpa from the project’s 2017 PFS.
Hawsons Iron has an opportunity to play a major role in the world’s ‘green steel’ movement, with its Supergrade product (70 per cent iron [Fe]) poised to be one of the highest-grade Fe products on the seaborne market.