Legacy Iron Ore to Accelerate Development of Mt Bevan with Milestone 60% Interest Gained

Legacy Iron Ore (ASX: LCY) has achieved a major milestone with the completion of a 60% earn-in to the Mt Bevan Iron Ore Project following a total A$3.5 million exploration expenditure.

Mt Bevan is a joint venture between Legacy and Hawthorn Resources (ASX: HAW) whereby Legacy could earn a 60% interest in the project by expending a minimum of $3.5 million by 3 October 2012 to develop the project to a Pre-Feasibility status.

Clearly, this is a major step forward for Legacy and allowing an accelerated development of Mt Bevan, as this deal now provides Legacy with effective control of the project.

Legacy is advancing towards a confidence category upgrade for the current Inferred Resource of 1.6 billion tonnes at 30.2% iron (25% iron cut-off grade).

Phase 3 of the resource definition drilling program is around 30% complete, consisting of essentially infill drilling designed to convert a substantial proportion of the Inferred Resource to Indicated status.

Drilling, which comprises 7,700 metres, is targeting a central 2 kilometre strike length of the 10 kilometre long magnetite resource at the Western banded iron formation target.

Exploration at Mt Bevan has delivered solid results, the last phase of drilling returning an approximate 300% increase in JORC Resources to 1.6 billion tonnes at 30.2% iron (25% iron cut-off grade) from the maiden 617 million tonnes at 32.1% iron (25% iron cut-off grade) returned in mid-2011.

Resources are likely to substantially increase on the back of the 250 to 350 million tonne exploration target at Mt Alexander, and the unexplored Eastern banded iron formation which extends for some 20 kilometres within the project area.

NMDC support

Legacy, in a first for an Australian explorer, has an investment and the backing of India’s largest iron ore miner NMDC.

This backing places the company in a strong position to fast track further exploration and mining studies at Mt Bevan.
 
Legacy is NMDC’s first ever foreign acquisition. NMDC has stated it intends to use Legacy as a foothold in Australia to acquire other mineral assets. NMDC has cash reserves of over $3 billion.

Analysis

Clearly, this is a major step forward for Legacy and allowing an accelerated development of Mt Bevan, as this deal now provides Legacy with effective control of the project.