It has been reported that Diversified explorer Cazaly Resources has signed an agreement with Leighton Contractors subsidiary HWE Mining to develop Parker Range iron ore project at Yilgarn, Western Australia.

The MOU provides a framework for co-participation, including an engineering, procurement, construction, operation and maintain contracting model for the mining and associated contracting required to deliver iron ore to the rail head.

HWE also has been given the option to acquire a minority interest, of up to 20 per cent in the project.

"This is a major step forward for the potential development of the Parker Range iron-ore project, as it provides a framework for an Epcom contract which will significantly reduce the capital expenditure requirements of the company," commented Cazaly MD Nathan McMahon.

Cazaly and HWE have a mutual benefit in combining their respective experience to develop the project. A study suggested that the project could produce up to 4.0 million tonnes per annum (mtpa) of highly marketable ultra-low phosphorus iron ore fines product.

But the project is still conditional upon satisfactory completion of due diligence, as well as Cazaly receiving an economic allocation of port access with Fremantle Ports to allow the export of iron ore.

It was also reported that the Company presented a detailed plan to the Fremantle Port Authority for the delivery of up to 4mtpa of iron ore to the port of Kwinana as part of their assessment of potential users of the facility.