Fortescue plans to purchase Australian peer Red Hawk Mining in an off-market takeover bid to gain access to an undeveloped iron ore mine near its major Solomon project in Western Australia, reported Bloomberg.
An offer price of as much as A$1.20 cash per share implies an equity value of A$254 million ($160 million) for Red Hawk.
“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,” said Fortescue officials. The project has a mineral resource estimate of 243 million tons.
The acquisition reinforces Fortescue’s growth strategy in iron ore even as demand softens.
Source: Bloomberg