Australia’s GWR Group has agreed to acquire a 70% stake in the Prospect Ridge magnesite project in Tasmania, Australia.

A binding term sheet was signed by GWR Group’s wholly-owned subsidiary Tasmanian Magnesium and Jindalee Resources to execute the deal.

Jindalee holds a 100% beneficial interest in the project through its subsidiary HiTec Minerals.

According to the terms of the deal, GWR Group will make a payment of A$1m to HiTec. This will include A$250,000 in cash for the mining information and A$750,000 in GWR’s ordinary shares for the tenement interest.

GWR Group chairman Gary Lyons said: “The GWR team has reviewed a number of projects to that will move the company into the ‘green sector’, and we believe the advanced Prospect Ridge Magnesite project provides an excellent opportunity to enter the ‘green’ global magnesium market whilst enabling GWR to apply our experience in bulk commodity mining and tap into our network of offtake partners and end-users.”

The Prospect Ridge project is located on the granted exploration licence, EL5/2016, which is spread across 51km². It comprises two deposits in the form of Arthur River and Lyons River.

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A considerable amount of work has already been carried out at the project. This includes diamond drilling, metallurgical test work, hydrological test work, resource modelling and feasibility studies.

The magnesite project is situated 55km west-south-west from the Port of Burnie, one of Tasmania’s major deep-water ports.

Magnesite is the principal ore for magnesium, which is classified as a critical mineral by the Australian Government.

GWR plans to advance the Prospect Ridge magnesite project through exploration and infrastructure studies. It also intends to start discussions with offtake partners.

The company has also received firm commitments to raise A$2m through a share placement in order to fund work programmes.

The sale also forms part of Jindalee Resources’ plan to focus on core assets.

Its key assets include the McDermitt lithium project in the US and the Widgiemooltha nickel-gold-lithium project in Western Australia.