The S&P/ASX 200 Materials Index (ASX: XMJ) closed 1.94% higher today, but one ASX iron ore share left it in the shade.
The Flinders Mines Ltd (ASX: FMS) share price soared 41.51% today to close at 75 cents.
Let's take a look at why this ASX iron ore share had such a good day.
Image source: Getty Images
Iron ore development news
Investors bought up Flinders Mines shares after the company advised a farm-in agreement with BBIG Group Pty Ltd had been terminated.
This will enable Flinders to negotiate a staged development of its Pilbara Iron Ore Project in Western Australia.
Stage one will involve a lower volume, near-term trucking operation to "take advantage of iron ore prices" and provide cash flow.
Flinders will also keep looking into stage two, a higher volume operation involving the use of rail, road, and port.
Commenting on the news, Flinders chair Cheryl Edwardes said:
The FIA termination provides Flinders with a more certain pathway to near term cashflow as we attempt to capitalise on current iron ore prices and pursue a less capital intensive, nearer-term mining and logistics solution.
Flinders said there will be one final shortfall payment of about $10 million.
Share price snapshot
The Flinders Mines share price has fallen around 15% in the past year. However, year to date, it has surged 32%. The company's shares have gained 50% in the last month alone.
For perspective, the S&P/ASX 200 Materials Index has fallen 7% in the past year.
Flinders Mines has a current market capitalisation of nearly $127 million.
