BC Iron (ASX:BCI) will acquire a 5 per cent stake in Cleveland Mining Company (ASX: CDG) to tap growth from its emerging Brazilian iron ore projects through a placement at $0.64 per share.
Last sale price for Cleveland was $0.65.
Under the terms of the deal, BC Iron is buying a 5% equity stake in Cleveland for approximately $6 million. BC Iron and Cleveland will form a 50:50 joint venture aimed at acquiring and developing new iron ore projects in Brazil.
The investment will provide an opportunity for BC Iron to enter the Brazilian iron ore space without the long lead time needed to get up to speed at a relatively low cost.
BC Iron will have top up rights to maintain its percentage interest for two years in any new capital raisings.
The deal provides Cleveland with cash to progress its exploration and development program.
The existing projects in Cleveland’s Amapá Hub, including the Ferradura Iron Project, will not at this stage form part of the agreement, BC Iron said in a statement today.
Proactive Investors is a market leader in the investment news space, providing ASX “Small and Mid-cap” company news, research reports, StockTube videos and One2One Investor Forums.