Australasian, Shougang talks collapse

17/07/2009 - 14:07

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Australasian Resources has stepped up negotiations with other companies after finance talks with Shougang Corporation over a $2.7 billion iron ore project in the Pilbara collapsed.

Australasian, Shougang talks collapse

Australasian Resources has stepped up negotiations with other companies after finance talks with Shougang Corporation over a $2.7 billion iron ore project in the Pilbara collapsed.

Shougang had until June 30 to deliver a finance offer for the Balmoral South magnetite iron ore project in return for rights to the operation.

Australasian shares had been placed in a trading halt since early this month as it tried to reach a successful conclusion with Shougang.

However Australasian today announced that the agreement with Shougang had now been terminated.

The Chinese company had been given exclusivity to make Australasian a finance offer however had twice missed the deadline.

In April, Australasian announced it will end Shougang's exclusivity period and widen its search for potential joint venture partners.

Today, Perth-based Australasian said it will hold formal meetings with a number of parties from the Middle East, North Africa and Asia.

Australasian added it will continue to hold talks with Shougang however the Chinese company will be on the same level playing field as other parties.

Meantime, Australasian's largest shareholder, billionaire Clive Palmer, had recently held talks with Shougang over the potential sale of part of his shareholding, but no deal was reached.

Australasian was due to merge with one of Mr Palmer's companies, Resources Development International, but that deal lapsed earlier this year.

Australasian is in talks with Mr Palmer to acquire an additional 500 million tonnes of iron ore adjacent to the Balmoral South project area.

At the end of the March quarter, Australasian had $8.2 million cash at hand.

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