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Legacy Iron Ore reviewing binding offer from NMDC

Legacy Iron Ore (ASX: LCY) is currently reviewing the offer which has been received from the Indian government owned National Mineral Development Corporation (NMDC) to become a cornerstone investor.

Legacy Iron said an announcement on the company's recommendation is anticipated to be no later than Tuesday 20 September.

NMDC, which is India’s largest iron ore group is looking to lock in iron ore supplies, and had earlier inked an MOU with Legacy Iron to acquire 50% equity in the company.
 
This would enable Legacy Iron to unlock and monetise the value inherent at Mt Bevan and gain a large cash injection.
 
Mt Bevan offers low strip ratios, coarse grind size, low silica and an average concentrate grade of 69.8% iron.
 
Importantly, the project is located close to road, rail and an existing deep water port, mitigating the need for excessive investment in infrastructure, notably port facilities.
 
There is potential for early cash flows from DSO hematite. The project has a JORC Inferred Resource of 617 million tonnes at 32.1% iron.


Benefits for Legacy Iron shareholders

Legacy Iron has outlined a list of benefits with having NMDC become a strategic investor, including:

- A substantial cash injection into Legacy, from an investor who is debt free, with approximately US$4 billion in cash reserves;

- A strong cornerstone shareholder with considerable experience in commissioning new resource projects and who is able to assist Legacy Iron with the development of its projects, to transition from a junior exploration company into a substantial mining company;

- Strong relationships with key iron ore customers of NMDC, in Japan, China and South Korea;

- Position Legacy Iron to become the vehicle for NMDC to pursue other opportunities in Australia; and

- Allow Legacy Iron to explore corporate opportunities aimed at realising value for assets, through re-structures and asset divestments.