Article by Cameron Drummond courtesy of Stockhead.
After an extensive 10-month long due diligence process, Gina Rinehart’s Hancock Magnetite Holdings has decided to pour $4 million into LCY’s Mt Bevan JV with Hawthorn Resources (ASX:HAW) to help fund exploration for lithium and other non-iron ore minerals.
The investment gives Hancock a 7.5% interest in the project, with $2.4m cash being paid to LCY and $1.6m to Hawthorn.
As part of the agreement, Hancock may fund additional exploration and development activities up to the tune of $22m and earn an additional 43.5% of the project, making it the owner.
In a three-stage farm-in approach, Hancock will need to spend up to $5m on exploration within 12 months to earn an additional 7.5%; spend up to $7m on drilling within a further 12 months to earn an additional 20%; and deliver a pre-feasibility study on the project within an additional 18 months at an expected cost of ~$10m.
If Hancock meets all three earn-in requirements, it will hold a 51% interest in the project and Legacy Iron and Hawthorn will hold 29.4% and 19.6% respectively.
“The signing of this agreement is a significant step in the development of the Mt Bevan project as it moves further towards commercialisation, LCY CEO Rakesh Gupta said.
“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.”
The $108m market-capped junior is up 17% today.
