Aurox restructures deal to conserve cash

Aurox Resources has negotiated a restructure of its previous arrangement with a supplier for components towards its Balla Balla magnetite iron project in the Pilbara.

The company, which went into a trading halt today, announced that Siemens AG has agreed to the contract restructure relating to the supply of gearless drives, used for magnetite concentrator.

Late last year, Aurox said it had taken action to all curtail engineering and procurement activities pending the outcome of full project funding.

The estimated capital cost of the project is around $1 billion.

In its half-yearly report released today, Aurox reported an impairment loss of $15.7 million on construction in progress after a review of the potential impact of the financial crisis on arrangements relating to engineering and equipment supply.

Aurox booked an interim net loss of $18.7 million, compared to the previous corresponding period's loss of $1.9 million.

The company said it is continuing talks with other major contract holders.

At the end of December 2008, the company had $28 million in cash.