BUZZ-Miner Fortescue jumps 1% on broader sector gains; MS positive on Red Hawk offer

Shares in Australia's Fortescue FMG.AX rise 1% to A$19.1

Gains in-line with 0.2% rise in local mining index .AXMM

FMG on Tuesday offered to buyout smaller iron ore miner Red Hawk RHK.AX for A$254 mln ($158.37 mln)

Red Hawk is the owner of a key iron ore deposit near Fortescue's existing Pilbara mines

FMG is the logical owner of the asset given proximity to its existing infrastructure at Solomon Hub in Pilbara, says Morgan Stanley analysts

Brokerage expects FMG to generate EBITDA of around A$2/ton at the potentially newly acquired Blacksmith iron ore project to offset the transaction price

The asset would also add extra mine life to the depleting Solomon hub - MS

FMG up 4.6% YTD; RHK shares up 0.8%

($1 = 1.6038 Australian dollars)