Clive Palmer's Mineralogy sells iron ore land to BC Iron for $9m

Clive Palmer’s Mineralogy has sold 600 sq km of Pilbara land to BC Iron for up to $9 million.

The tenements are largely unexplored and have potential for iron ore deposits among other minerals, according to BC Iron (ASX:BCI).

Investors were happy with the purchase, pushing up BC Iron’s shares by 7 per cent higher to 15c on Friday.

The $9 million may come in handy for Mr Palmer, who is fighting attempts by liquidators PPB Advisory to freeze $200 million of his assets as part of a court case over money owed to former Queensland Nickel workers.

Queensland Nickel failed in 2016 amid debts of $300 million.

“Given the tenements have been largely unexplored or underexplored for many decades it presents a relatively unique opportunity for BC Iron to implement an extensive exploration program for iron ore and other minerals in the Pilbara,” BC Iron’s managing director Alwyn Vorster told investors.

The tenements lie within trucking distance of BC Iron’s proposed Cape Preston East Port.

Under terms of the deal, BC Iron will pay $9 million once both tenements have been acquired.

BC Iron will also pay a royalty of 2 per cent revenue on the first 100 million tonnes of iron ore mined increasing to 3.5 per cent after 110 million tonnes.

BC Iron reported a profit of $5.7 million last year on revenue of $64 million.

BC has a market cap of just under $60 million.