Gina Rinehart’s Hancock Prospecting has committed to its earn-in of the Mt Bevan iron ore project in Western Australia after completing the necessary due diligence on the project.
Through its subsidiary Hancock Magnetite Holdings, the privately-run miner will make an initial investment of $9 million to acquire a 30 per cent interest in the project.
Current Mt Bevan owners Legacy Iron Ore (60 per cent) and Hawthorn Resources (40 per cent) would be paid $8 million with the remaining $1 million available as working capital.
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.
Legacy Iron Ore and Hawthorn would hold a 29.4 per cent and 19.6 per cent stake respectively following the completion of the PFS.
Following that, and subject to positive outcomes, appropriate work will be undertaken with the intention of advancing the project to a bankable feasibility study.
Hancock subsidiary Atlas Iron will act as the manager of the joint venture.
Hawthorn managing director Mark Kerr said Mt Bevan has the potential to be an important asset in the green steel movement.
“The Mt Bevan project has a favourable orebody geometry indicating it should be amenable to low-cost open pit mining, with potential for a high-quality magnetite concentrate with low impurities, and potential for a premium priced product as magnetite demand increases to meet the growing demand for cleaner steel-making.”
Legacy Iron Ore shares peaked at $0.040 on Thursday following the news, a 100 per cent jump from its share price at start of the week. Hawthorn shares reached a high of $0.14.