Article by Daniel Newell and Sean Smith courtesy of Kalgoorlie Miner.
Gina Rinehart’s Hancock Prospecting has revealed the terms of a joint venture earn-in deal under which it will partner with Indian miner NMDC to look for lithium and other critical minerals in WA’s Central Yilgarn.
Under the terms of the deal, Hancock will spend up to $26 million to earn a 51 per cent stake in a new exploration joint venture at Mt Bevan, 250km north of Kalgoorlie-Boulder , from Hawthorn Resources and the NMDC-backed Legacy Iron Ore.
Shares in Hawthorn and Legacy jumped as much as 31 per cent when the stocks emerged from trading halts on Thursday.
Just two weeks ago, Mrs Rinehart met privately with Indian Prime Minister Narendra Modi during his Australian visit.
The new partnership provides for Hancock — which already has its foot on the junior explorers’ magnetite deposit at Mt Bevan — to make an initial $4m investment to stake a 7.5 per cent claim in the project’s lithium, nickel and copper, with $2.4m paid to Legacy and the rest to Hawthorn.
The deal allows Hancock to spend up to $22m more on further drilling, exploration and the funding of a pre-feasibility study to earn a 51 per cent share of those minerals.
Hancock’s head of projects, Sanjiv Manchanda, said the pact flowed from a deepening bilateral relationship between Australia and India. “This work will draw on the significant expertise that is now being assembled at (Hancock), which has a mandate to lead the study, design, and development of a globally significant pipeline of projects,” he said.
Legacy and Hawthorn combined would retain rights to 85 per cent of the end product from any successful joint venture, leaving Hancock with the other 15 per cent.
Legacy chief executive Rakesh Gupta said the deal was a significant step in the development of Mt Bevan.
“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,” Mr Gupta said.
Mt Bevan sits adjacent to the Mt Ida project owned by Delta Lithium, which on Wednesday inked a $46.4m deal with Idemitsu that lifted the Japanese group’s stake in the explorer to 15 per cent. The Hancock agreement has been negotiated against a background of high-level talks between India and Australia on expanding the former’s access to critical minerals.
Perth deal-maker and Argonaut director Liam Twigger said he had yet to see a let-up in interest from deep-pocketed offshore companies looking to snap up WA lithium companies, mines or deposits.
“The appetite is insane,” Mr Twigger said, adding the interest reflected a belief lithium supplies would be stretched to meet demand.
“They’re positioning themselves for the next five or 10 years — they’re not thinking that new mines are going to come on and flood the market, they’re seeing shortages for a long period of time.”
