State-owned mining company NMDC today inked a Memorandum of Understanding to acquire up to a 50% stake in Australian mineral exploration company Legacy Iron Ore, Chairman and Managing Director Rana Som said.
Som said the proposal is still at a preliminary stage and the cost of acquiring shares is yet to be determined. The deal is also subject to all necessary regulatory and shareholder approvals being received.
"The MoU gives access to NMDC to get into Australia and devise further strategy. The valuation of the stake is yet to be done," Rana Som told PTI from Australia, adding that Legacy has interests in gold and manganese, besides iron ore.
The agreement, upon formal completion, will give Legacy the opportunity to source and secure additional resource projects for development and financing with the backing of NMDC as the company's biggest shareholder.
NMDC intends to use Legacy as a vehicle to acquire large-scale Australian bulk commodity projects such as coal and iron ore.
"Legacy is delighted to have entered into a Memorandum of Understanding whereby NMDC can acquire up to 50% of the company, allowing Legacy to be become a diversified resource house. This is the first investment of its type by NMDC into the Australian resource sector and Legacy is delighted to be the company chosen as NMDC's vehicle to acquire and develop more advanced projects," Legacy Chief Executive Sharon Heng said in a statement.
NMDC currently produces 30 million tonne of iron ore at a grade of more than 62% iron content per annum and is India's single largest iron ore producer, with reported resources of 800 million tonne.
Legacy holds highly prospective iron ore tenements in both the central Yilgarn and Pilbara areas of Western Australia. All of its projects are located close to established infrastructure areas.
Legacy recently expanded its gold portfolio in Western Australia with the acquisition of the Mount Celia gold project close to its South Laverton gold project, located north-east of Kalgoorlie, in the eastern Goldfields of Western Australia.
Upon receiving all necessary approvals, NMDC has the right to appoint nominees to the board of Legacy.
