Fortescue Metals Group has signed a Memorandum of Understanding for the purchase of Kerry Stokes's Iron Ore Holdings to include IOH’s Iron Valley in an expanded Nyidinghu development and mining program in the Pilbara.


Iron Valley is contiguous to Fortescue’s Nyidinghu deposit and the iron ore resource at Nyidinghu extends into Iron Valley.

 

The agreement has been secured with a $25 million payment, giving Fortescue a 13-month exclusive option on Iron Valley, exercisable with the payment of a $20m and a 2 to 5 per cent royalty on iron ore shipments made from the deposit. Fortescue also has the option from IOH to obtain a 50%+ interest in its Maitland River magnetite deposit.


Fortescue Chief Executive Officer Nev Power said with more than 2 billion tonnes of iron ore Resource already identified at Nyidinghu, the project is large scale and a core focus inFortescue’s plans to expand production beyond 155 million tonnes per annum. 


“Iron Valley’s location as a contiguous ore body to Nyidinghu would provide Fortescue with infrastructure layout and mining operations flexibility,” Mr Power said.