Miner Fortescue jumps 1% on broader sector gains; MS positive on Red Hawk offer

Red Hawk Mining

29/01/2025 02:52

** Shares in Australia's Fortescue  FMG.AX  rise 1% to
A$19.1
    ** Gains in-line with 0.2% rise in local mining index
 .AXMM 
    ** FMG on Tuesday offered to buyout smaller iron ore miner
Red Hawk  RHK.AX  for A$254 mln ($158.37 mln)
    ** Red Hawk is the owner of a key iron ore deposit near
Fortescue's existing Pilbara mines
    ** FMG is the logical owner of the asset given proximity to
its existing infrastructure at Solomon Hub in Pilbara, says
Morgan Stanley analysts
    ** Brokerage expects FMG to generate EBITDA of around
A$2/ton at the potentially newly acquired Blacksmith iron ore
project to offset the transaction price
    ** The asset would also add extra mine life to the depleting
Solomon hub - MS
    ** FMG up 4.6% YTD; RHK shares up 0.8%

($1 = 1.6038 Australian dollars)

 (Reporting by Rishav Chatterjee in Bengaluru)
 ((Rishav.Chatterjee@thomsonreuters.com;))