Legend Mining has received a request for the first right of refusal from Hong Kong Asia Iron Holdings subsidiary Extension Hill to purchase the Mt Gibson Gold Project in Western Australia.

Extension Hill owns a number of iron ore and coal development projects in the Mid West of Western Australia as well as a magnetite pellet plant project in Nanjing, China.

If the transaction is completed by March 12, Legend will bank USD 7 million plus USD 1.4 million in performance bond able to be used on exploration on its 2,900 square kilometer Cameroon iron ore project.

Legend initially entered into an agreement in November to sell its non-core Mt Gibson Gold Project to Top Iron for a cash consideration of AUD 7 million. However one of the conditions of the sale was that Legend had to exhaust all relevant rights of first refusal and similar third party rights under the existing licence agreement.

As a result of Extension Hill’s exercise of its rights under the existing agreement and provided that the company is able to complete the acquisition of the Mt Gibson Project, then the sale of the project to Top Iron will not go ahead.

Extension Hill can now purchase the project on the same terms agreed with Top Iron, for USD 7 million cash and the return to Legend’s working capital account of the USD 1.4 million term deposit currently securing performance bonds in relation to the project.

The transaction is subject to satisfaction of conditions including a 60 day due diligence period and Foreign Investment Review Board approval.