Cazaly Resources has increased its stake in the Mount Caudan tenement area in the Yilgarn region of Western Australia from 80% to 95% after reaching an agreement with Gondwana Resources.
The company acquired the extra interest with an initial $270,000 payment and a further $842,500 to be paid in a lump sum or in shares.
According to Cazaly managing director Nathan McMahon, the Mount Caudan tenement is shaping up as a key iron ore asset.
“We feel Mount Caudan will prove to be an important iron ore project in the Yilgarn region and to have secured a 95% stake in it is a real coup for Cazaly and its shareholders,” he said.
The company believed there was around 23.5 million tonnes of iron ore in the area and was forecasting a 55.4% recovery rate.
As part of the original agreement, Cazaly acquired the exclusive rights to explore for iron ore and mine any finds, while Gondwana retains the right to explore and mine all other minerals, including gold.
The tenement contains the Parker Range Iron Project, which is ideally located around 400 km from Perth and 60 km south of Southern Cross, the company said.
Cazaly also began discussions with private rail company Westnet Rail and the Esperance Port Authority regarding infrastructure requirements.