Legend Mining’s (ASX:LEG) shares are expected to trade higher following the satisfaction of all conditions precedent (CP) regarding the sale of its Ngovayang Iron Project in Cameroon to a subsidiary of Jindal Steel and Power Limited.

Completion of the contract is scheduled to take place on 15 July 2014. The sale will leave Legend in a very strong position, with the sale adding A$17.5 million in three tranches, and adding to the cash of $3.9 million the company had at the end of March 2014.

The tranche payment breakdown is: - Tranche 1 – A$6M at completion (July 2014) - Tranche 2 – A$6M in July 2015; and - Tranche 3 – A$5.5M payment following execution of a Mining Convention between Jindal and the Cameroon Government.

Mark Wilson, managing director for Legend, commented: “The satisfaction of the CP in the Jindal sale agreement is the result of an extensive period of working with Cameroon authorities and local shareholders.”

” The completion of the transaction will leave Legend in a wonderfully cashed up position to search for new project opportunities and to explore its Western Australian tenement holding located in the Fraser Range.”

Cancellation of 800 million performance options

In other Legend news, the company has agreed to cancel 800 million Performance Options, with consideration for the cancellation being A$1 million.

The cancellation helps clean up the Legend share register, and removes any potential overhang.

Fraser Range tenements

Legend exploration licence E28/2342 which covers 356 square kilometres in the Fraser Range District of Western Australia was granted on 20 March 2014.

The area is considered prospective for Nova-style nickel-copper and Tropicana-style structurally controlled gold mineralisation.

Analysis

Following today’s deal, Legend Mining could well be one of the most undervalued companies on a cash basis listed on the ASX with tenements in the Fraser Range.

Legend has a market cap. of circa $13.5 million at $0.007, yet had close to $4 million in cash at the end of March 2014, plus a handy 1.5 million shares in Sirius Resources (ASX:SIR) worth another $4.5 million on paper.

The first $6 million tranche from the Cameroon Project sale will be received next month.

This cash and scrip alone is worth close to $0.008 a share versus a share price of $0.006.

Add to this another $6 million in a year and $5.5 million following execution of a Mining Convention between Jindal and the Cameroon Government.

This comes to $26 million in cash and scrip, or $0.013 per share, for a company with a large expsoure in probably the hottest exploration postcode in Australia.

Adding further weight to the stock, Mark Creasy is the largest shareholder.