Infrastructure and materials company India Globalization Capital (IGC) has entered into a Letter of Intent (LOI) to acquire 25 % stake in an iron ore mine located in Aohan Banner, Inner Mongolia.

The agreement also includes acquisition of 25% interest in a nearby beneficiation plant.

IGC’s Hong Kong-based subsidiary will take a 25% interest each in Aohan Banner Delin Iron Separation, that owns the mine, and in Aohan Banner Hengli Mining, that owns the processing plant.

Under the terms of the deal, which is subject to satisfactory completion of due diligence, IGC will issue 1.35 million shares of its common stock in exchange for 25% ownership in both companies.

The company expects to complete the transaction in the July-September quarter.

As per the internal company estimates, based on geological studies, the mine comprises estimated deposits of 4.17 million tons of ore with a Fe content between 20 and 30% and can operate for 11 months in a year.

IGC’s 25% ownership also includes a wet magnetic separation plant near the mine that has a capacity to produce an estimated 200-250mt of high-grade iron ore every day.