Padbury Mining has struck a deal with Yilgarn Infrastructure to acquire all the intellectual property of Yilgarn relating to its investor-backed proposal to build an open-access rail network to service the region for $A2.25 million, which would see ore shipped through either the existing port at Geraldton or a new facility at Oakajee.

Padbury has made the move to ensure it has the infrastructure in place to start production by 2015.

In a statement, Padbury said it recognised the current conditional mandate afforded to Oakajee Port and Rail but also acknowledged the need to have an infrastructure solution that would meet its development timetable.

Yilgarn developed its proposal between 2006 and 2008, but was unsuccessful in its bid to win an exclusive right from the WA government to build the assets, which OPR ultimately won in 2008.

Pacific Capital was engaged to undertake an assessment of the indicative potential value range of the intellectual property based on an evaluation of Yilgarn’s documentation, which included company records, engineering studies, project definition documents, financial modelling, Chinese investment agreements, financing term sheets and associated legal documents.

The intellectual property will be vested in a Padbury wholly owned subsidiary, Midwest Infrastructure.

The deal is subject to obtaining all shareholders’ consent and approvals, and a due diligence review by Midwest, and will be put to shareholders in a soon-to-be-announced general meeting.

OPR’s $4.4 billion Oakajee port and rail development has an exclusivity period with the state government until March, at which time it must sign an implementation agreement.

If it fails to achieve this deadline, OPR risks losing a key exclusivity clause which was part of a state agreement signed between it and the government in 2009 and prevents any new port project being considered between Yanchep and Carnarvon.

Shares in Padbury were down 6.45% or 2c to 29c in early morning trade.