Magnetite producer Karara Mining has repaid a $30 million loan to part owner Gindalbie, under a deal struck with Gindalbie's Chinese partner Ansteel earlier in the year.
The repayment was made possible by Ansteel in June paying Karara $30 million, on top of a previous $30 million loan to the joint venture.
Ansteel has the option of converting the entire $60 million into Karara equity, which would increase its shareholding in the Mid West project operator to 52 per cent.
The transactions are separate to a $US230 million ($239 million) funding from Ansteel which can also be converted into equity.
Gindalbie said the Karara payment replenished its corporate cash reserves to more than $35 million.
"This puts us in a sound position from a corporate perspective, ensuring that we are well placed to pursue the evaluation and development of 100 per cent-owned projects and other corporate opportunities while the ramp-up of the Karara project is completed," Gindalbie managing director Tim Netscher said.
Gindalbie's shares were up 0.5 cents, or 3.7 per cent, to 14 cents at 11.45am.