Article by Ralph Wragg by Australian Business News.

Legacy Iron Ore (ASX:LCY) and Hawthorn Resources (ASX:HAW) said Hancock Magnetite Holdings has executed the earn-in agreements into the Mt Bevan iron ore project.

The project was a joint venture between Legacy Iron (60% interest) and Hawthorn (40% interest) situated 250km north of Kalgoorlie and 100km west of Leonora in the Central Yilgarn region of Western Australia.

Hancock will make an initial investment of $9 million for a 30% interest in the project with $8 million cash being paid to Legacy Iron ($4.8m) and Hawthorn ($3.2m) and the remaining $1 million to be available as working capital for the new joint venture.

Upon completion of the initial investment, Hancock will hold a 30% interest in the project with Legacy Iron and Hawthorn holding 42% and 28% respectively. Earn-in occurs with Hancock increasing its interest in the project by a further 21% through the funding of a completed pre-feasibility study.

After the earn-in, Hancock will hold 51%, Legacy will hold 29.4% and Hawthorn will hold 19.6% of the project. Work programs will then be undertaken with the intention of further advancing the project to a bankable feasibility study. Hancock has appointed Atlas Iron as the manager of the new joint venture.

Legacy Iron and Hawthorn retain all non-iron ore rights. Hawthorn managing director Mark Kerr said: “The Mt Bevan project has a favourable orebody geometry indicating it should be amenable to low-cost open pit mining, with potential for a high-quality magnetite concentrate with low impurities, and potential for a premium priced product as magnetite demand increases to meet the growing demand for cleaner steel-making.”