Legend sells Cameroon iron ore project

Perth-based Legend Mining has entered an agreement for up to $17.5 million in the sale of its 90 per cent share in the Ngovayang magnetite iron ore project, in the Republic of Cameroon to Indian company Jindal Steel and Power.

Legend is being advised by Azure Capital in relation to the transaction.

In a two-tranche sale, Legend will receive $12 million upon completion of the transaction, followed by the possibility of $5.5 million if a ‘mining convention’ between the Cameroon government and Jindal is approved within 10 business days.

Legend admits it may not receive the second tranche payment as the convention conditions may not be satisfied within the specified timeframe.

Legend acquired the project in February 2010 via a 90 per cent shareholding in Cameroon company Camina SA.

The Ngovayang project is a large scale exploration site covering 2,469 square kilometres with three permits.

Legend cited reduced market sentiment for West African iron ore projects in the last 12-24 months as its reason for selling.

“We believe the transaction is a good result for Legend’s shareholders," managing director Mark Wilson said.

"The absence of direct shipping ore at the project coupled with the current state of global financial markets has put the further development of the project beyond the reach of an exploration company like Legend.

“Jindal’s proposed investment will be a great boost for the project, Camina and Cameroon, and will allow Legend to pursue new opportunities.”

Shares in Legend are trading at 37.5 cents as of 7.30am, WST.