Australasian Resources Limited (ASX:ARH) Market Update on Iron Ore Project
We have executed a non binding MOU with Mineralogy Pty Ltd whereby our subsidiary and project company International Minerals Pty Ltd ("IM") will now have access to 2 billion tonnes of iron ore. Final details are being worked out between the companies in order to finalize a binding agreement. I anticipate a further announcement in about a month. "The Chairman of Mineralogy Pty Ltd has also received a letter of interest from the Royal Bank of Scotland ("RBS") whereby they have confirmed that they are keen to pursue a satisfactory engagement letter for the issue of USD$500 million in high yield notes by IM pursuant to 144-A/ Regulation S to support the development of the project."
In addition, the other signatories to the MOU today were, MCC HK, a subsidiary company of MCC of China whereby MCC HK has agreed to assist IM to raise 75% of the project costs by way of export credit from Chinese banks.
MCC HK has also agreed to accept the appointment as ECP/EPCM for the project on mutually agreed terms and conditions based on the strong background of MCC HK in this area and also for securing project finance from Chinese Banks.
The agreement shall be on a fixed price lump sum turnkey basis and the design in accordance with the Chinese financial study agreed by both parties.
The MOU is flexible to allow for Chinese and or other offtake partners for product produced from the Project and IM confirms that it is also in discussions with a major trading house to participate in offtake agreements and also for a USD$600 million investment in the project.
IM is currently updating the financial evaluation of the Project and these updated figures will be released to the market as soon as they are to hand.
Dio Wang, the CEO of Australasian Resources commented further that: "This is a major achievement for ARH at the right time, especially considering that the comparable Sino Iron Project next door will begin to export product next year."
About Australasian Resources Limited
Australasian Resources Limited, through its wholly owned subsidiary International Minerals Pty Ltd, plans to develop the world-class Balmoral South Iron Ore Project in the Pilbara region of Western Australia.
Royal Bank of Scotland Group plc
Australasian Resources Limited