Iron Ore Holdings has offloaded its Koodaideri South iron ore tenements in the Pilbara to Rio Tinto in exchange for $32 million cash plus a 2 per cent royalty payment.
The Koodaideri South tenements are one of five tenement groups, which comprise IOH’s Central Satellite deposits.
IOH said discussions were continuing with a number of interested parties on the remaining tenements.
The Koodaideri South tenements have three identified iron ore deposits, which jointly contain 106 million tonnes of JORC-compliant resources at an average of 58.6 per cent Ferrous.
IOH managing director Alwyn Vorster said the transaction had disproven external theories that the deposits were “infrastructure-stranded” and too small to contribute value to the company.
“The cash plus royalty value achieved for the Koodaideri tenement provides a benchmark for the Iron Valley and Bungaroo South deposts, which are more valuable in terms of resource size and strategic location,” Mr Vorster said.
Mr Vorster said funds generated from the sales process would be applied to further exploration and project studies and potential new business opportunities.
IOH chairman Richard Court said the company, whose major shareholder is Seven Group chairman Kerry Stokes, was pleased to be involved with one of the world’s largest miners in Rio Tinto.
PCF Capital Group and Gilbert + Tobin acted as IOH’s commercial and legal advisors, respectively.
At close of trade today (WST) IOH’s stock had rocketed 24.4 per cent, to $1.07.
