PERTH (miningweekly.com) – Joint venture (JV) partners Legacy Iron Ore and Hawthorn Resources have struck a deal with a subsidiary of Hancock Prospecting to earn into the Mt Bevan iron-ore project, in Western Australia.

The project is currently a JV between Legacy and Hawthorn, with Legacy holding a 60% interest while Hawthorn holds a 40% share.

Under the terms of the agreement struck with Hancock Magnetite Holdings, that company would make an initial A$9-million investment to earn a 30% stake in the JV, with A$8-million of the funds to be paid to Legacy and Hawthorn in proportion to their interest, and the remaining A$1-million to be used as working capital for the new JV.

Legacy’s interest in the project would decline to 42% at this point, while Hawthorn would retain a 28% interest.

Hancock could earn an additional 21% interest in the project by funding a prefeasibility study during the Stage 1 earn-in, reducing Legacy’s shareholding to 29.4%, and Hawthorn's to 19.6%.

On completion of this earn-in, and subject to the favourable outcome of the feasibility study, additional work programmes will be undertaken to advance the project to a bankable feasibility study.

Legacy CEO Rakesh Gupta said on Monday that the JV agreement with Hancock was the first step to brining the Mt Bevan project into development.

“As you may be aware, the demand of premium high-grade iron-ore product magnetite has been growing due to its efficiency and ability to reduce environmental pollution for the steel industry. I am highly confident that with the support of our parent company NDC Limited, Hancock Prospecting and Hawthorn, this project will be successfully developed and would bring a social- and economic boost to regional Yilgarn province.”

The earn-in agreement remains subject to the parties reaching an agreement on a new JV agreement within a defined time period, as well as standard regulatory approvals.