Laconia Resources has entered a $7.5 million joint venture with a China-based investment group to fund the development of the Mooletar iron ore project near Mount Magnet.
The joint venture is a three stage agreement, under which China’s Sinoz Mining Investment Group will invest $7.5 million over two years.
Stage one involves a $1 million payment to fund exploration at Mooletar; stage two will see Sinoz pay a further $1.5 million to give it a 50 per cent interest in the JV; and stage three involves a $5 million payment, which will take Sinoz’ interest to 80 per cent.
Laconia said the agreement was a “significant validation” of the project’s development potential.
The company’s stock soared against the trend on the news, defying a market that dropped three per cent today, to finish trade up 16 per cent, at 5.8 cents.
Laconia will manage exploration under the joint venture, and hold a 20 per cent free carried interest up until a decision to mine is reached.
The joint venture will cover the iron ore rights solely at Mooletar, and Laconia will retain the rights to gold and all other minerals at the project.
“The funding provided by our JV partners will allow is to complete detailed exploration and development at Mooletar and unlock the significant development potential of the project for the benefit of our shareholders,” Laconia managing director Ian Stuart said.
Laconia has defined an exploration target of between 216 million and 264 million tonnes of iron at Mooletar.
The project is located approximately 125 kilometres from the proposed rail line that would access planned port infrastructure at Oakajee.
