Shares in Cazaly Resources Ltd have been placed in a trading halt over the company's Parker Range iron ore project in Western Australia.

Cazaly said in its request to the Australian Stock Exchange (ASX) that it is expected to make an announcement regarding the finalisation of an agreement with respect to the development of its Parker Range iron ore project.

Cazaly shares will remain in pre-open until the earlier of the commencement of normal trading on Wednesday, 2 June 2010, or when the announcement is released to the market.

Earlier this year, Cazaly announced that its primary focus is to bring Parker Range, its planned first mine, into production by the third quarter of 2011.

Cazaly co-managing director Nathan McMahon said in January that Parker Range project requires an up front capital of $78 million. Further $28 million will be required for test work in the third year of mining.

McMahon announced at the time that the company planned to sell part or its entire West Kalgoorlie gold project to fund Parker Range. Also, Cazaly said that it has signed confidentially agreements with potential strategic partners including several Chinese and Japanese groups showing strong interest in reviewing the project.

The Parker Range Iron Ore Project lies approximately 15 km southeast of Marvel Loch in the Yilgarn Iron Ore Province and approximately 60 kilometres by road south of the Perth-Kalgoorlie railway.

Cazaly shares last traded 49.5 cents.