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GBG 11:39 AM Gindalbie signs Development Agreement with Ansteel
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00756812
MAJOR AUSTRALIAN IRON ORE PROJECTS TO PROCEED FOLLOWING LANDMARK JOINT VENTURE AGREEMENT
Sydney, 6 September 2007 – Following a joint formal signing ceremony today, Western Australian iron ore company Gindalbie Metals Limited (ASX: GBG) is pleased to announce that it has executed a wide-ranging Joint Venture Development Agreement with leading Chinese steel and iron ore company, Anshan Iron & Steel Group Corporation (Ansteel), to proceed with development of the Karara Magnetite Project and Mungada Hematite Projects in Western Australia.
The announcement follows the delivery earlier this week of positive Bankable Feasibility Studies for both iron ore projects, which are located 225km east of Geraldton in the Mid West region of Western Australia. The projects will involve a total combined investment of up to A$1.8 billion in new mining and processing facilities and associated infrastructure both in Western Australia and China.
The Agreement was signed in Sydney by the President of Ansteel, Dr Zhang Xiaogang, and the Chairman of Gindalbie, Mr George Jones in the presence of the President of The Peoples Republic of China, Mr Hu Jintao, and Australia’s Prime Minister, Mr John Howard, reflecting the importance of the Agreement to both Gindalbie and Ansteel and to the continued development of Australia’s iron ore industry.
Under the terms of the Development Agreement, Gindalbie and Ansteel have agreed to develop both the Karara andMungada Projects subject to the following conditions:
o the signing of an Equity Joint Venture agreement for the Joint Venture Pellet Plant in north eastern China;
o finalisation of the approval for the decision to mine within two months;
o finalisation of off-take and financing arrangements; and
o environmental approvals being received for both the Australian and China Projects.
The financing terms of the Development Agreement are generally consistent with the original Karara Joint Venture Feasibility Study Agreement with the Project proposed to be funded on a 70/30 debt to equity ratio. For the equity
component of the Project, Ansteel will contribute A$105 million plus 50% of the required equity whilst Gindalbie will contribute the balance of equity funding which equates to approximately 25% of the total equity funding requirement.
The Project is now to be developed under an incorporated structure.
Earlier this week Gindalbie completed a previously announced A$39 million share placement to Ansteel, giving it a 12.78% interest in the Company.
The Development Agreement covers both the production of hematite lump and fines (with shipments targeted to commence in the first quarter of 2009) and magnetite concentrate in Australia and pellets in China (with production
scheduled to commence in 2010).
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