Alkane Exploration Ltd and the privately-owned Randolph Syndicate will combine their adjoining iron ore exploration tenements with Consolidated Minerals to form a new company, BC Iron Ltd, set to raise $6 million in its IPO.
Alkane Exploration Ltd and the privately-owned Randolph Syndicate will combine their adjoining iron ore exploration tenements with Consolidated Minerals to form a new company, BC Iron Ltd, set to raise $6 million in its IPO.
BC plans to raise up to $6 million through the issue of 24 million shares at 25 cents each, lodging its prospectus in early November.
The company will have 54 million issued shares on listing, with Alkane owning a 16.6 per cent interest and ConsMins holding 27.7 per cent.
The spin-off will comprise tenement holdings in the Nullagine region, around 200 km south east of Port Hedland and 100km north of Newman.
The tenements border the iron ore projects of BHP Billiton Ltd and Fortescue Metals Group, and are around 50 to 100 km west of BHP's Newman to Port Hedland iron ore railway.
BC has appointed Carmichael Capital Markets Pty Ltd as the corporate advisor to the deal and DJ Carmichael Pty Ltd as sponsoring broker to the planned listing.
The spinoff holds the rights to acquire 100 per cent of all minerals excluding diamonds and an 80 per cent option granted to over gold, silver and uranium mineralisation granted to Vaalbara Resources Pty Ltd in three of BC's 14 tenements.
The BC board is chaired by Tony Kiernan with former Cazaly Resources Ltd exploration manager Mike Young acting as managing director. They will be joined on the board by Terry Ranstead, Garth Higgo and Steve Chadwick.
Mr Young said continuing record levels of demand for iron ore represented a significant opportunity to develop new supply sources.
"The strategic location of these tenements in the East Pilbara will enable BC Iron to pursue a co-ordinated and focused exploration strategy to develop substantial iron ore resoruces proximal to existing and developing infrastructure in the region," he said.
Alkane's shares closed up one cent at 24 cents, while Consolidated Minerals' shares ended five cents lower at $2.29.
A related announcement from Consolidated Minerals is pasted below
CONSOLIDATED MINERALS' SHAW RIVER TENEMENTS TO FORM PART OF NEW PILBARA IRON ORE VENTURE
Consolidated Minerals Ltd today announced that it has reached agreement with newly-formed BC Iron Limited ("BC Iron") for BC Iron to farm-into 100% of Consolidated's Shaw River Iron Ore tenements in Western Australia.
Consolidated's Shaw River tenements comprise 10 exploration licences located 70km north of its Mindy Mindy iron ore project. As part of a three-way transaction, BC Iron has also reached agreement with ASX-listed Alkane Exploration Ltd and the Randolph Syndicate to farm-into their adjoining tenement holdings.
BC Iron is planning a $6 million Initial Public Offering (IPO) and listing on the Australian Stock Exchange through a Prospectus which is scheduled to be lodged in early November 2006. On listing, Consolidated will retain a 27.78% interest in BC Iron, with Alkane holding 16.67%. The transaction will enable Consolidated to focus on continuing to pursue development options for its Mindy Mindy Project while at the same time unlocking the potential value of the Shaw River tenements.
The iron-bearing pisolite in the region is hosted within the Bonnie Creek, Nullagine River and Shaw River palaeo-channel systems, which straddle both Consolidated's and Alkane's tenements. The consolidation of the two tenement groups will facilitate a coordinated regional approach to exploration of the channel iron systems, and enhance the potential for eventual development of the assets.
BC Iron will have a combined 1,500km2 tenement holding including all of the Bonnie Creek palaeo-channel system and most of the Shaw River and Nullagine River systems, and will pursue focused exploration programs targeting the delineation of iron ore mineralisation in palaeo-channels extending over a cumulative 90km strike length.
As part of the transaction, Consolidated's General Manager - Group Services, Garth Higgo, will join the Board of BC Iron.
Commenting on the transaction, Consolidated's Managing Director, Rod Baxter, said it represented a sensible enhancement of the development potential of these adjoining iron ore exploration interests in the East Pilbara region. "With our principal focus on the Mindy Mindy asset, this transaction will increase the potential for a commercial discovery to be made on the Shaw River tenements through a focused and coordinated exploration approach via BC Iron. Consolidated will retain significant exposure to future exploration success on these tenements through its 28% shareholding in BC Iron, with the added benefit of gaining exposure to the adjoining assets previously held by Alkane Exploration."
