HONG Kong trader Noble Group has increased its stake in iron ore miner Territory Resources, freeing the company of debt as it aims to expand through acquisition.

The Perth-based miner yesterday announced an agreement with its major shareholder for a debt-to-equity conversion of $US20.9 million -- the total Territory still owed Noble after the group threw it a lifeline.

Territory managing director Andy Haslam said Noble had told the company it had done a good job of " righting the ship" after being in desperate straits two years ago, and was keen to help with the debt to support the miner's growth plans.

Territory had reduced its debt from $93m to $20.9m over the past 18 months, but the world was " passing the company by" , he said. " We need to put ourselves in a position that if there are any acquisitions or someone comes to us, we are in a position to jump, rather than scrambling when that time comes.

We have had a very big wallop of debt sitting over our head for a long time and we have whittled that away. But in the meantime there have been companies that came to us, and we've gone to others to talk about looking at a project or a merger, and they have all been concerned about our debt.

" That is cleaned off the slate now. We think this is a game-changer for us."

Mr Haslam said the company had looked at about 16 companies in the past 12 months and would have been keen on deals with about four of them.

Territory had difficulties during the global financial crisis, compounded by the collapse of juniors that the company had invested in.

Noble Group came to the rescue of the then debt-laden miner in October 2009, when it took on most of its debt.

The new debt-to-equity agreement will increase Noble's 22 per cent interest in Territory to about 43 per cent, but the miner is also conducting a capital raising, which should dilute the Hong Kong trader's interest to about 35 per cent.

The miner's shares were unchanged at 31.5c yesterday.