(Bloomberg) -- Fortescue Ltd. plans to buy Red Hawk Mining Ltd. to gain access to an undeveloped iron ore mine near its major Solomon project in Western Australia.
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The offer price of as much as A$1.20 cash per share implies a fully diluted equity value for Red Hawk of A$254 million ($160 million), the world’s fourth-largest iron ore miner said Tuesday. Red Hawk closed at A$0.82 on Friday.
“Red Hawk is the owner of the Blacksmith Iron Ore Project, which is an undeveloped iron ore project located 30 kilometers (19 miles) west of Fortescue’s Solomon operations in the Western Hub,” the company said.
The project has a mineral resource estimate of 243 million tons of iron ore. The move reinforces Fortescue’s growth strategy in the steelmaking ingredient even as demand softens.
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