State-run National Mineral Development Corporation (NMDC) has completed due diligence on its proposed acquisition of a 50 per cent stake in Australian exploration company Legacy Iron Ore and is expected to submit a formal offer this week.
According to Legacy, the Perth-based miner anticipates receiving a formal offer from NMDC in a day or two.
In a filing to the Australian Securities Exchange (ASX) today, Legacy said it has been granted a trading halt, pending an update regarding the transaction with NMDC.
“Legacy Iron Ore has indicated that National Mineral Development Corporation Ltd (NMDC) has finished due diligence work and anticipates receiving a formal offer from NMDC, to be tabled during the week commencing August 22, 2011.
“Legacy has provided relevant information (exploration, legal and financial) sought by various independent experts who are conducting due diligence on behalf of NMDC,” Legacy said in its filing to the ASX.
NMDC officials were not immediately available for comment.
India’s largest iron ore miner is looking to secure iron ore supplies to feed the burgeoning demand in the country and inked a MoU with Legacy Iron on May 24 to acquire a 50 per cent equity stake in the company.
According to Legacy, the stake sale would enable the Australian miner to unlock and monetise the value inherent at its Mt Bevan iron ore mines and gain a large cash infusion.
“Legacy Iron Ore has been granted a trading halt by the ASX pending an update on the transaction with the National Mineral Development Corporation Ltd, with the company’s shares placed in pre-open.
“Legacy Iron will be in the halt until the earlier of trade opening on Friday, August 26, or the announcement being released,” Legacy said in its filing today.
NMDC intends to use Legacy as a vehicle to acquire large-scale Australian bulk commodity projects such as coal and iron ore, a senior official of NMDC had said earlier.
Legacy holds prospective iron ore tenements in both the central Yilgarn and Pilbara areas of Western Australia. All the projects are located close to established infrastructure areas.