POSCO Australia will acquire a 16.65% stake in junior explorer Jupiter Mines by investing A$7.81m to enable the firm to capitalise on acquisition and growth opportunities.

The deal, subject to shareholder approval, includes a 48 million Jupiter shares placement at 16.3 cents a share.

POSCO has also entered into an off-take agreement for up to 50% of Jupiter’s future DSO-grade iron ore production.

POSCO has the right to appoint a representative to the Jupiter board after the placement.

Jupiter said the transaction leaves it with more than A$14.5m in cash to fund its Central Yilgarn iron ore projects and manganese assets.

According to Jupiter executive chairman Geoffrey Wedlock, POSCO’s technical capability and experience will contribute to Jupiter’s exploration and development activities at Central Yilgarn.

“We are encouraged by the opportunities available to us in the Central Yilgarn area where we are presently focusing our efforts,” Wedlock said.

POSCO is already in a deal with a Jupiter shareholder Pallinghurst to pursue steel feed projects.