Mining firm Gindalbie Metals Ltd (ASX: GBG) jumped to the next stage of its Karara iron ore project as it announced on Monday that it has inked a deal with Oakajee Port and Rail that would define its use of the deepwater port near Geraldton in Western Australia.

As the company enters stage two of its Karara project, Gindalbie said that sealing the memorandum of understanding that embodies the Oakajee Port's supply chain agreement would clearly initiate its long term plans for the iron ore project in the area.

Company managing director Garret Dixon said that the agreement would only be the start of the full-blown exploration of the mining site as he underscored that "the development of Oakajee Port will play a vital role in helping us realise the full potential of the Karara Project, providing us with the port infrastructure necessary to reach full production capacity under a future Stage 2 expansion."

Gindalbie just recently commence work activities on the stage one of the Karara project, which is said should be delivering initial output of 10 million tonnes per annum by the mid-part of 2011.

The deal with Oakajee, of course, would facilitate the smooth shipping and exporting of iron ore using the Port of Geraldton.