East Perth-based Legacy Iron Ore Ltd is poised to receive $1.8 million from an investment by Sydney-based Western Resources (Australia) Pty Ltd via a share placement.
Both companies have signed a non-binding memorandum of understanding and will, over the next four months, work to formalise the agreement.
Under the agreement Legacy will issue Western with 5.5 millions shares at a price of 33 cents each to raise $1.8 million, and appoint Western director Zhitai Wang to the board.
Chief executive Sharon Heng said the investment by Western would be used to accelerate Legacy's exploration programme in the Pilbara and Kimberley.
"We are particularly keen to welcome Mr Wang on to our Board as he has extensive commercial experience in China in both the government and private sectors," Ms Heng said.
"His involvement will enhance our ability to establish strong alliances with Chinese steel industry partners in the future."
A prominent businessman and Chinese national, Mr Wang has held key positions with the Chinese Ministry of Chemistry and the Economic Reform Committee of the Shandong Provincial Government which has jurisdiction over the Shandong Steel Group.
