Saint Istvan Gold Ltd, a company whose directors include former NSW premier Neville Wran, has bought a majority stake in the Hamersley iron ore exploration project in Western Australia.

Shares in Cazaly Resources Ltd, which sold the stake for AUD 4 million, shed three cents, or 6%, to 47 cents while shares in Saint Istvan were untraded.

Cazaly on Monday said Saint Istvan had the right to earn an initial 51% interest in the project in WA's Pilbara region, which hosts the Winmar iron ore deposit.

Saint Istvan will pay the AUD 4 million in three separate tranches within 60 days.

Saint Istvan also has the right to buy the remainder of the project under certain circumstances.

Cazaly also said it would manage and operate the project while Saint Istvan will provide up to AUD 6 million towards a feasibility study within three years.

Cazaly said in a statement “During this period, Cazaly's interest in the project is effectively free carried.”

Cazaly said the sale allowed it leverage the Hamersley project, which it believed had huge potential, while focusing on its Parker Range iron ore project, also in WA.

The Hamersley project is next to Fortescue Metals Group Ltd's Solomon project, which is a key part of Fortescue's expansion plans.

(Sourced from AAP)