Australasian to spin-off nickel assets

Perth-based Australasian Resources Ltd will spin-off its former namesake asset - the Sherlock Bay nickel project - into a new company so that it canh focus on its iron ore assets.

The company, which changed its name from Sherlock Bay Nickel Corporation Ltd in June last year, said in an announcement that the spin-off would provide better value for shareholders.

The decision followed an agreement between CITIC Pacific Ltd, Mineralogy Ltd and Australasian's major shareholder, Clive Palmer, to acquire another iron ore project at Balmoral, in the Pilbara.

Australasian has also commenced negotiations with Mr Palmer to acquire additional iron ore assets adjacent to its current Balmoral South Iron Ore Project.

The full text of a company announcement is pasted below

Australasian Resources Ltd ("Australasian") wishes to advise it has made an in principle decision to focus on the development of iron ore projects.

This follows the recent announcement that CITIC Pacific Ltd ("CITIC") has concluded agreements with Mineralogy and Australasian's major shareholder, Professor Clive Palmer to acquire another iron ore project at Balmoral, in the Pilbara region of Western Australia.

Following Professor Clive Palmer's confirmation of his willingness to do so, Australasian has commenced negotiations with Professor Palmer in order to acquire additional iron ore assets adjacent to its current Balmoral South Iron Ore Project.

To enable the Australasian to focus on its iron ore strategy, Australasian proposes to spin-off its nickel and other assets into a separate listed entity. Details of the structure of the spin-off and timing have yet to be determined, however it is envisaged that shareholders would have an opportunity to become investors in the spin-off entity either on an entitlements or priority allocation basis. Tricom Equities Ltd has been appointed to advise the Company on this transaction.

Australasian will keep the market informed of all developments in this regard and believes this strategy will be in the best long term interests for Australasian and its shareholders.

Australasian believes a focus on the development of the Balmoral South Iron Ore Project and the potential acquisition of new iron ore assets makes sense with iron ore prices tipped to rise by up to 50% for the coming year.

The proposed spin-off of the Company's non iron ore assets, including the Sherlock Bay Nickel Project, will provide a better opportunity to deliver more value from these projects to shareholders.