PERTH (miningweekly.com) – Gina Rinehart’s Hancock Magnetite Holdings has inked a lithium earn-in and joint venture (JV) agreement with junior explorers Legacy Iron and Hawthorn Resources over the Mt Bevan project, in Western Australia.

Under the agreement, Hancock will make an initial unconditional investment of A$4-million for a 7.5% interest in the project, with A$2.4-million in cash to be paid to Legacy and A$1.6-million to Hawthorn.

Hancock could also fund a further A$22-million in exploration and development activities to earn a further 43.5% interest in the project over three stages, the last of which would include delivering a prefeasibility study for the project.

If Hancock meets all three earn-in requirements, the company will hold a 51% interest in the project area, with Legacy Iron and Hawthorn holding 29.4% and 19.6% respectively.

Legacy and Hawthorn will also be entitled to receive an additional cash payment of up to A$10-million if a lithium pegmatite Joint Ore Reserve Committee-compliant resource of more than five-million tonnes with an average grade of 1.2% lithium oxide or above is delineated.

Furthermore, Legacy has a right to acquire up to 75% of the end product produced by any successful JV project, with Hawthorn retaining a right to take 10% and Hancock retaining a right to take 15%.

“The signing of this agreement is a significant step in the development of the Mt Bevan project as it moves further towards commercialisation. We welcome Hancock into the project and look forward to working with them and leveraging their expertise in the area, and the development of this project,” said Legacy Iron CEO Rakesh Gupta.

The lithium agreement follows completion of an extensive due diligence process by Hancock and the finalisation of the non-binding deed with Hancock for minerals other than iron-ore, as announced in August last year.

The agreement for lithium follows the completion of a similar JV agreement in April last year on the same tenement for iron-ore minerals.

“The Mt Bevan project is unique and has delivered an outstanding result for Hawthorn shareholders; firstly we have a world class well defined magnetite orebody which sits side by side with a potential new lithium province on the Mt Ida fault and adjacent to Delta Lithium’s discovery. Hawthorn Resources is delighted to welcome Hancock into this next exciting chapter of the Mt Bevan venture,” said MD Brian Thornton.