Gondwana Resources Limited said that it is selling its remaining 15% interest in the Mt Caudan iron ore project to Cazaly Resources Limited's unit Cazaly Iron Pty Limited for AUD 862,500 in cash and Cazaly Resources shares.

Following a June 2007 farm in deal, Cazaly Iron earned an 80% interest in Mt Cauban and Gondwana granted a 5% interest to William Richmond in March 2008.

The deal is expected to be completed in early September 2009. Once it is, Gondwana can concentrate its iron ore ambitions on the 100% owned Corunna Downs iron prospect in the Pilbara, which it believes has significant potential.

Australia Mining cited Mr Nathan McMahon MD of Cazaly as saying that the Mount Caudan tenement is shaping up as a key iron ore asset. He added that "We feel Mount Caudan will prove to be an important iron ore project in the Yilgarn region and to have secured a 95% stake in it is a real coup for Cazaly and its shareholders."

The report added that Cazaly estimates that there are around 23.5 million tonnes of iron ore in the area and is forecasting a 55.4% recovery rate. Cazaly has begun discussions with private rail company Westnet Rail and the Esperance Port Authority regarding infrastructure requirements.

(Sourced from www.proactiveinvestors.com.au)