Cazaly Resources has agreed commercial terms for the sale of its Parker Range Iron Ore Project to an Australia-based private diversified group Gold Valley Iron.

The transaction includes the sale of its 100% owned subsidiary Cazaly Iron, which holds the tenements that comprise the Parker Range Iron Ore Project.

The company said that the sale follows a comprehensive process of dealing with several parties interested in the project over an extended period.

Cazaly joint managing director Nathan McMahon said: “This agreement realises some immediate value from the Parker Range Project in an iron ore market that has recently shown signs of recovery. Following completion of the proposed transaction, the Company will receive a significant cash injection and provide shareholders further upside by way of additional payments and a royalty from production.

“We are highly confident that the project will grow further and are confident Gold Valley has the requisite technical, managerial and importantly, marketing skills to develop the asset.”

According to the company, the deal unlocks immediate value for its shareholders and Gold Valley’s strategic investment to subscribe for 10 million ordinary shares would provide further confidence in the alliance.

Parker Range Iron ore project details

The Parker Range iron ore project is located approximately 15kms south-east of Marvel Loch and approximately 400kms east of Perth, in the Yilgarn region of south-western Western Australia.

According to Cazaly, the resource estimate for the Mount Caudan deposit at the project is currently 35.1mt @ 55.9% Fe. The resource features two primary ore-types that include a haematite – goethite Banded Iron Formation (BIF) and smaller component of secondary Canga and Detrital ore.

In May, Woomera Mining  signed a Heads of Agreement with Cazaly to acquire an 80% stake in Cazaly’s Mt Venn gold and nickel project, which is  located 125km northeast of the township of Laverton in the north eastern goldfields of Western Australia.