As part of its first move towards overseas acquisition, the National Mineral Development Corporation (NMDC) has submitted its formal binding bid to acquire 50% stake in Australian exploration firm, Legacy Iron Ore, for an undisclosed amount.
According to informed sources, the company is still negotiating the deal size even while the industry sources estimate the size to be around $40 million.
Legacy said in a filing to the Australian Securities Exchange (ASX) that it has received a formal proposal from NMDC to form a strategic alliance. Trading of its shares on the ASX were halted till Thursday.
“The company wishes to provide an update on a formal offer received from National Mineral Development Corporation (NMDC) of India regarding a proposal to form a strategic alliance via a cornerstone investment,” Legacy said in a statement.
In May, NMDC had entered into an memorandum of understanding with Legacy Iron Ore to buy 50% stake, which may give access to the India’s largest iron ore producer to Australia’s mineral resources.
Legacy Iron Ore is a Perth-based Australian exploration company, established to search for iron ore and gold deposits. The flagship project is Mt Bevan Iron Ore project located west of Leonora in the central Yilgarn region. Mt Bevan is a joint venture between Legacy and Hawthorn Resources whereby Legacy will earn a 60% interest in the project by expending a minimum of $3.5 million to develop the project to a pre-feasibility status.
Legacy Iron Ore had progressed initial discussions with NMDC and NMDC had sent independent experts to begin legal, technical and financial due diligence for acquiring a key shareholding in Legacy. Besides, key exploration and drilling data for the Mt Bevan, Hamersley and Robertson Range projects were reviewed by IMC Group Consulting (IMC) in the data room and offices, say few reports.