Arafura investor takes 51% of project

Arafura Resources has further strengthened its ties with its major Chinese shareholder, which has agreed to take a 51 per cent stake in the Jervois iron-vanadium project in the Northern Territory.

Under a letter of intent deal, Jiangsu Eastern China Non-Ferrous Metals Investment Holding (ECE) has agreed to sole fund up to $8 million on exploration at Jervois.

The deal follows ECE decision to take a 25 per cent interest in Perth-based Arafura for $24 million.

The announcement is below:

Arafura Resources Ltd ("Arafura") is pleased to announce that it has signed a letter of intent ("LOI") with Jiangsu Eastern China Non-Ferrous Metals Investment Holding Co., Ltd ("ECE") for a joint venture to further evaluate its Jervois Iron-Vanadium Project in the Northern Territory.

Under the terms of the LOI, ECE has agreed to sole fund up to AUD$8,000,000 on exploration of the Jervois Project tenements (EL 10215, EL 26231, EL 26318, EL 26812) for an equity interest of 51%.

The LOI was signed on the afternoon of 17 April by both organisations at a ceremony hosted in Darwin by the Northern Territory Minister for Primary Industry, Fisheries and Resources, The Honourable Kon Vatskalis. ECE was represented by its Director General, Mr Shao Yi, leading a 6-person delegation from China, whilst Arafura was represented by Chairman Ian Laurance AM, Managing Director, Alistair Stephens, and senior executives.

Following the signing ceremony, Mr Stephens said that the ECE commitment to the Jervois JV followed closely on the heels of ECE's decision to purchase a 25% interest in Arafura for AUD$24 million. "This further commitment by ECE cements our rapidly growing association and demonstrates ECE's determination to join Arafura in developing exploration opportunities. Exploration is a growth engine for both Arafura and ECE, and we look forward to building on both organisations' strong track record of discovery success."

Drilling at Jervois by Arafura in 2006 and 2008 encountered numerous wide intervals of magnetite-hosted vanadium mineralisation. Metallurgical test work in 2007 determined that a high-vanadium, high-iron grade concentrate was recoverable using standard techniques.