Pearl Gull Iron to Sell Cockatoo Island Project Offshore WA for $4.5 Million

Pearl Gull Iron (ASX: PLG) has executed an agreement for the sale of its interest in the historical Cockatoo Island project off the northwest coast of Australia.

Under the agreement with Buccaneer Resources, Crestlink and JCA WA Nominees, Pearl Gull is divesting tenements, plant, and infrastructure associated with the Cockatoo Island operation for a consideration of $4.5 million, as well as a 4% equity interest in Crestlink and royalties payable on the extraction of certain materials from the tenements.

Buccaneer is a wholly owned subsidiary of the unlisted Crestlink, while JCA WA Nominees is a private Australian company.

Cockatoo Island History

The high-grade iron ore mine on Cockatoo Island began operations in 1951 and subsequently produced millions of tonnes of ore.

Pearl Gull acquired its interest in the iron ore deposit in January 2018, with the island still containing a significant iron ore resource, then released a mineral resource and exploration target for the project in March 2023.

That ultimately included a maiden inferred mineral resource estimate for the Magazine area of the project of 24.5 million tonnes grading at 34.3% iron.

Crestlink is undertaking development of the island’s supply base, a $100m operation the Western Australian government gave major project status to in 2019, which it will commence construction of sometime later this year once it has gained the proper permitting.

Successful Outcome for PGL

Pearl Gull chair Russell Clark said the Board considered the proposed Cockatoo Island divestment to be a successful outcome for the company and its shareholders, taking into consideration the work and expenditure it would need to progress the project.

He said the cash consideration would provide Pearl Gull with funding for the identification of potential new projects and growth opportunities, while the equity interest in Crestlink and any royalties payable in the future gave it ongoing exposure to the Cockatoo Island project.

Pearl Gull will seek shareholder approval for the sale at a general meeting it expects to hold in late October.