A major Chinese investment firm has received regulatory approval to take a 60 per cent equity stake in Asia Iron Holdings, the company behind the Extension Hill Mid West magnetite project.
A major Chinese investment firm has received regulatory approval to take a 60 per cent equity stake in Asia Iron Holdings, the company behind the Extension Hill Mid West magnetite project.
Asia Iron has received approval from Australian and Chinese regulators to issue new shares to Chongqing Chonggang Minerals Development Investment (CCMD).
CCMD's equity investment into Asia Iron is worth up to $280 million.
The transaction will result in CCMD having a 60 per cent equity interest in Asia Iron with 40 per cent held by SINOM Investments.
Asia Iron is a wholly owned subsidiary of Hong Kong headquartered SINOM Investments Limited.
CCMD's chairman Jiacai Liu said the achievement of China's National Development Reform Commission approval represents another very important milestone for the project.
"We remain fully committed to the development and future growth of the Extension Hill Magnetite Project and other projects of Asia Iron," Mr Liu said.
SINOM's chairman Andy Zhang said the two parties had been working closely in the past months to head to the completion of the transaction.
"We are looking forward to continuing the cooperation with CCMD as we move into the development of the project," Mr Zhang said.
See full company statement below:
Asia Iron's Extension Hill Mid West magnetite project has taken a major step forward on
the road to production following regulatory approvals for a Chinese joint venture to take
a 60% equity stake in the company.
Asia Iron Holdings Limited (Asia Iron), currently a wholly owned subsidiary of Hong Kong headquartered SINOM Investments Limited, has received approval from key Australian and Chinese regulators to enter into a transaction that will see Asia Iron issue new shares to Chongqing Chonggang Minerals Development Investment Limited (CCMD).
CCMD's equity investment into Asia Iron is worth up to $280million and the transaction will result in CCMD having a 60% equity interest in Asia Iron with 40% held by SINOM
Investments Limited.
CCMD has received approval from China's National Development Reform Commission
(NDRC) for the transaction, satisfying a key condition of binding transaction agreements between CCMD and SINOM signed in May. It follows Australian Foreign Investment
Review Board approval for the transaction received in February.
CCMD has now released a US$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 are expected to be received 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 development of Stage 1 of the Extension
Hill Magnetite Project, which will target production of 10 million tonnes of high grade iron ore magnetite concentrate annually, will be provided by proportional debt and equity contributions from CCMD and SINOM together with project debt financing from a Chinese bank.
CCMD's Chairman Jiacai Liu said the achievement of NDRC approval represents another very important milestone for the project.
"We remain fully committed to the development and future growth of the Extension Hill Magnetite Project and other projects of Asia Iron," Mr Liu said.
SINOM's Chairman Andy Zhang said the two parties had been working closely in the past months to head to the completion of the transaction.
"We are looking forward to continuing the cooperation with CCMD as we move into the development of the project," Mr Zhang said.
"Once again, we would like to thank the Chinese and Australian government authorities for their support to this transaction and the efficient manner in which they have dealt with the transaction approvals process."
