Under the deal, Cu-River Mining issued a $500,000 deposit to IMX, while the balance will be paid if the conditions have been satisfied.

The transaction will allow IMX focus on exploring Nachingwea project in Tanzania, particularly the Chilalo graphite and Kishugu gold prospects, where drilling is scheduled to begin in October 2014.

It will also allow the company to discharge $3m liability under the guarantee provided to Flinders Ports, as part of the previous logistics contract for the Cairn Hill mine.

IMX chairman Derek Fisher said that the sale of the Mt Woods tenements completes the company’s withdrawal from iron ore in South Australia.

"While the Mt Woods tenements contain a substantial magnetite resource, potential shareholder returns from their development would require significant funding and take considerable time to explore and develop."

The transaction is subject to approval from the South Australian Government.