Iron Bear Resources (ASX:IBR) was informed by Vale that it will not proceed to the second phase of the development agreement for the Iron Bear iron ore project in Canada, and the mining firm's board expects a final notice will be lodged in the near future, which will effectively terminate the agreement and unencumber the project, according to a Tuesday Australian bourse filing.

Vale acknowledged the completion of the first phase of the development agreement in a draft notice. Vale provided a total of $18 million in phase one contribution to advance the project. Iron Bear Resources retains ownership of the project.

Its shares fell 44% in recent trading on Tuesday, reaching their lowest point in over a year.