Here’s why the Hawsons Iron share price spiked 12.5% on Monday

Two Santos oil workers with hard hats shake hands in the foreground of oil equipment.Two Santos oil workers with hard hats shake hands in the foreground of oil equipment.

The Hawsons Iron Ltd (ASX: HIO) share price spiked in early trade on Monday after the company announced a major land deal.

The iron ore developer and producer has entered a two-year option agreement that could see it snapping up land suitable for an export facility.

At the opening bell on Monday, Hawsons Iron shares shot up to 49.5 cents – representing a 12.5% gain. However, they have since given back those gains, and some. At the time of writing, the Hawsons Iron share price is 42 cents, down 4.55%.

Let’s take a closer look at today’s news from Hawsons Iron.

What boosted the Hawsons Iron share price today?

Hawsons Iron stock surged in morning trade following news of a deal that could see it buying 1,000 acres suitable for developing a deep-water export facility for $14 million.

The land spans three plots and is located at Myponie Point on South Australia’s eastern Spencer Gulf.

Under the agreement, Hawsons Iron will have the option to buy the land for two years after the execution date. The agreement brings the company closer to its goal of supplying high-grade iron ore products.  

It comes on the back of a memorandum of understanding between the company and Flinders Ports. This sees the pair agreeing to work together to design, construct, and operate the Myponie Point Port. The end goal is the export of 20 million tonnes of magnetite concentrate each year.

The port is expected to be able to export Hawsons’ 70% iron magnetite concentrate by the second half of 2024.

Hawsons Iron managing director Bryan Granzien commented on the news driving the company’s share price today:

This agreement secures a crucial export site required for the planning and development of our 20 million tonnes per annum project and importantly provides significant additional space to accommodate expansion of the Myponie Point Port into a multi-user, bulk commodity export facility.

Now that we have identified our port location, planning and detailed design work can continue on the deep-water port facility and the underground slurry pipeline from Broken Hill, including all approvals and land access agreements along the 392-kilometre pipeline route.

The Hawsons Iron share price is currently 180% higher than it was at the start of 2021. It has gained 167% since this time last year.

The post Here’s why the Hawsons Iron share price spiked 12.5% on Monday appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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