Legacy Iron Ore Ltd (ASX: LCY) and Hawthorn Resources Limited (ASX: HAW) have executed a binding joint venture agreement in respect of lithium and other minerals with Hancock Magnetite Holdings Pty Ltd.
Commenting on the agreement Legacy Iron CEO Rakesh Gupta said “The signing of this agreement is a significant step in the development of the Mt Bevan project as it moves further towards commercialization. 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 agreement formalizes terms for Hancock to earn-in to all non-iron minerals, focusing on the exploration and development of lithium and other critical minerals at Mt Bevan (Project).
Hancock has made a committed initial investment of A$4M for a 7.5% stake in the Project. Legacy Iron and Hawthorn will receive A$2.4M and A$1.6M respectively in cash. Hancock has also expressed interest in funding further exploration and development activities that are worth a potential A$22M.
This stepwise investment will allow them to increase their interest in the project by 43.5% across three stages. The first phase involves Hancock expending up to A$5M on exploration activities within a year to earn an additional 7.5%. They will then have the option to invest up to A$7M on drilling activities in the following year to earn 20%.
The last phase would require Hancock to deliver a pre-feasibility study (PFS) in an additional 18 months, which would cost around A$10M. Upon completing all three earn-in requirements, Hancock will hold a 51% interest in the project, while Legacy Iron and Hawthorn will hold 29.4% and 19.6% respectively.
Legacy and Hawthorn are entitled to receive an additional cash payment of up to US$10M if a lithium pegmatite JORC resource of greater than 5,000,000t with an average grade of 1.2% Li2O or above is delineated.
To read more about this news, please visit http://www.legacyiron.com.au/
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