Jul

20

China approves CCMD’s A$280m WA iron-ore investment..

July 20, 2010 | Leave a Comment

PERTH – China’s National Development Reform Commission has approved Chongqing Chonggang Minerals Development’s (CCMD’s) A$280-million investment in the Extension Hill magnetite project, in Western Australia, paving the way for the Chinese group to take a 60% stake in the project.

Australia’s Foreign Review Investment Board approved the investment by CCMD in February.

Project owner Asia Iron, a wholly owned subsidiary of Hong Kong-headquartered SINOM Investments, will now issue new shares to CCMD.

CCMD has released a $40-million prepayment, with completion of the transaction subject to other conditions, including CCMD receiving approvals and signoffs from other relevant Chinese regulatory authorities. These were expected within the next month.

Following completion, the parties will immediately start preliminary works for the project development.

Under the terms of the agreements, funding for the development of stage one of the Extension Hill magnetite project, which will target production of ten-million tons a year of high-grade iron-ore magnetite concentrate, will be provided by proportional debt and equity contributions from CCMD and SINOM, along with project debt financing from a Chinese bank.

The Extension Hill project has a Joint Ore Reserves Committee compliant reserve of over 200-million tons, and a resource of 240-million tons grading in excess of 68% iron.


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