Giralia Resources NL, one of the state's uranium hopefuls, will spin off its Pilbara iron ore tenements as part of a $4 million float as Red Hill Iron Ltd.
Giralia Resources NL, one of the state's uranium hopefuls, will spin off its Pilbara iron ore tenements as part of a $4 million float as Red Hill Iron Ltd.
On listing, Giralia will retain a 19.6 per cent stake in Red Hill Iron. It currently holds 49 per cent, after the amalgamation of its tenements with those of a private syndicate.
Giralia shareholders will be given priority rights for 60 per cent of the offer, which plans to issue 20 million 20 cent shares listed on the Australian Stock Exchange in February next year.
Shares in Giralia closed nine per cent higher, at 30 cents.
West Perth-based Giralia has embarked on building its uranium portfolio this year in response to higher prices for the metal.
In October, it announced the spin off of U308 Ltd, a wholly-owned uranium exploration company.
Giralia's full announcement to the ASX is below.
Giralia Resources NL ("Giralia") is pleased to advise that the intended ASX listing of Red Hill Iron Limited ("Red Hill Iron") is anticipated to occur in February 2006 and that Giralia shareholders are to be offered priority application rights in the manner and on the terms set out below.
Red Hill Iron proposes to raise up to $4 million through the issue of up to 20 million fully paid ordinary shares at 20 cents per share through a prospectus lodged with the ASIC on 12 December 2005. Applications under the prospectus will open on 9 January 2006.
The Board of Directors of Red Hill Iron will comprise current Giralia Directors Graham Riley and Stan Macdonald, along with local mining identities Joshua Pitt and Garry Strong.
Giralia currently holds a 49% interest in Red Hill Iron, which was formed through the previously announced amalgamation of the Company's West Pilbara iron ore tenement holdings with those of a private syndicate.
Giralia will retain a 19.6% interest in Red Hill Iron on listing.
Priority Application Rights The Company has negotiated priority application rights for eligible Giralia shareholders for up to 12 million shares (60%) of the offer by Red Hill Iron.
Giralia shareholders holding at least 40,000 shares and registered at the close of business on the Priority Application Date of 21 December 2005 will be eligible for the priority offer ("eligible holders"). The priority offer to eligible holders will be for a minimum application of 10,000 shares ($2,000), with the balance of further priority offer shares distributed on a pro- rata basis relative to the total number of Giralia shares held by Giralia shareholders who are entitled to participate in the priority offer.
Giralia shareholders not eligible for the priority offer can apply through the general offer of 8 million fully paid ordinary shares in Red Hill Iron. Giralia shareholders applying in this manner will be treated in the same way as other applicants under the general offer. A copy of the prospectus will be sent to all Giralia shareholders, and the prospectus is also available on Red Hill Iron's website at www.redhilliron.com.au.
Iron Ore Joint Venture - API
Red Hill Iron controls a significant block of iron ore prospective tenements covering around 1,900 square kilometres extending southwards from the Robe River-Pannawonica iron ore mining operations, including known Channel Iron Deposits ("CIDs") associated with Tertiary aged river channels close to the current Red Hill Creek, Cane River, Urandy Creek and Duck Creek drainages.
Red Hill Iron has entered into a joint venture with API Management Pty Ltd ("API"), a company equally owned by Aquila Resources Limited and US coal miner AMCI Holdings Australia Pty Ltd - to explore for iron ore on Red Hill Iron's West Pilbara Iron Ore Project area.
API will act as managers for the joint venture and have committed to expend $600,000 prior to 31 December 2006. API may earn 60% interest by expending a total of $4 million prior to 29 November 2009, and can then elect to earn a further 20% by providing all Red Hill Iron's share of project expenditure to the commencement of production, refundable only from 80% of Red Hill Iron's share of mine revenue.
API plans to conduct programmes of detailed geological mapping and sampling to delineate the CIDs followed by drill evaluation of the most prospective targets.
Previous exploration of the extensive outcropping mesas of Tertiary Robe Pisolite within the Red Hill Iron tenement block in the 1970s returned significant drill intersections, up to 20 metres thick at grades in the range 50-51% iron. In the Robe River mining area immediately to the north, substantial potential is recognised for higher grade CID zones on the flanks of, beneath, or adjacent to outcropping mesas.
Gold and Base Metals Potential
The joint venture with API is for iron ore only. Red Hill Iron's West Pilbara tenements are also prospective for gold and base metals mineralisation and the Company intends to use funds raised under the prospectus to explore the project area for Carlin style and shear hosted gold deposits along with volcanic and sediment hosted base metal deposits.
Anticipated timetable
The anticipated timetable for the listing of Red Hill Iron is as follows:
Lodgement of prospectus by Red Hill Iron with ASIC
12 December 2005
Date for determining priority application rights for Giralia
shareholders (Priority Application Date)
21 December 2005 (5pm)
Dispatch of prospectus to Giralia shareholders
4 January 2006
Offer opening date
9 January 2006
Closing date (priority offer to Giralia shareholders)
31 January 2006
Closing date of prospectus
7 February 2006
Anticipated listing date of Red Hill Iron on ASX
17 February 2006
These dates are indicative only and may be subject to change.
