Legacy Iron Ore Ltd, the Australian arm of iron ore miner NMDC, has signed an agreement with TNG Ltd of Australia to acquire its zinc-lead-silver project in the northern territory of the country.

The Manbarrum tenements consist of three exploration licences and two mineral authorities, which cover a combined area of about 407 sq km.

These tenements are fully owned by TNG’s subsidiary, Tennant Creek Gold Pty Ltd.

Legacy said in a filing with the Australian Stock Exchange that an initial cash payment of A$2 million will be made to TNG on completion of the due-diligence and no later than 90 days from the signing of the agreement. A further $3 million in cash of Legacy shares will be paid on a deferred basis.

Further, the due-diligence of 60 days can be extended by Legacy by paying a nominal fee for a further 30 days.

Sharon Heng, Managing Director, Legacy Iron, said the potential acquisition of the Manbarrum project would compliment the company’s existing gold and base metal portfolio. It will also allow Legacy to look at a greater portfolio of assets to spin off in the future.

“The acquisition will position the company in the major base metal and ferrous area and may also provide an interest in the Legune prospect and other base metal deposits in the region,” Sharon said.