Iron Ore Holdings plans to buy back up to 10 per cent of its shares on market, saying the iron ore explorer’s share price does not reflect the fair value of its assets.

Shares in the Kerry Stokes-backed company were up 2.5 cents, or 1.88 per cent, at $1.355 at 1410 AEDT.

Iron Ore Holdings said in a statement on Thursday that it recently sold its non-core Central Satellite deposits in Western Australia for about $1.30 for each tonne of iron ore resource that had been defined by the company.

However, the market was valuing its resources at only 30 cents per tonne, Iron Ore Holdings said.

It has appointed Foster Stockbroking to undertake the first $5 million tranche of the buyback.

All shares acquired would be cancelled, Iron Ore Holdings said.

According to IRESS data, it currently has 166 million shares on issue.