29/01/2008 - 09:24

Chinese Iron and Steel take 3.9% stake in Apollo

29/01/2008 - 09:24

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Newly listed diversified Australian resources company Apollo Minerals Ltd has confirmed that Chinese Iron and Steel Grouphave taken a 3.9 per cent stake in the company and is looking to increase its stake to 19.9 per cent.

Newly listed diversified Australian resources company Apollo Minerals Ltd has confirmed that Chinese Iron and Steel Grouphave taken a 3.9 per cent stake in the company and is looking to increase its stake to 19.9 per cent.

 

Full announcement pasted below:

Chinese Iron and Steel Group take 3.9% stake in Apollo following
Placement - expected to increase stake to 19.9%
Key points:
- Apollo Minerals completes A$1m Placement of 2.94m Shares at 34 cents per share to
Chinese Iron and Steel Group - shares placed at 21% premium
- Chinese Iron and Steel Group currently holds 3.9% interest in Apollo
- Chinese Iron and Steel Group has option to subscribe to a further 6.7m shares at 34
cents per share on or before until 31 March 2008
- Apollo to seek shareholder approval to allow Chinese Iron and Steel Group to move to
19.9% of Apollo
- Apollo focusing on two iron ore projects: one in West Australia and one in South
Australia
Newly listed diversified Australian resources company Apollo Minerals Ltd (ASX code: AON)
("Apollo") has taken another significant step forward in the development of its Australian iron ore
projects following confirmation that Chinese Iron and Steel Group have taken a 3.9% stake in the
Company and is looking to increase this stake to 19.9%, subject to shareholder and regulatory
approval.
The Chinese Iron and Steel Group acquired this initial stake through their involvement in a
Placement, by which Apollo raised A$1M through the issue of 2.9m shares at 34 cents per share (a
21% to the Apollo share price1).
The A$1m Placement follows completion of the formal Joint Venture Agreement (JVA) as announced
on 24 December 2007 in relation to Apollo's right to earn up to 80% of exploration licence
applications 47/1378 and 47/1379. These two tenement applications cover a significant portion of the
newly discovered Mt Oscar Iron Ore Project, located in the Pilbara region of Western Australia (see
attached map).

Within these tenements a number of areas with hematite and magnetite targets have been identified
which could represent a significant iron ore resource. Importantly for any proposed development of
this project it is located close to infrastructure - including ports which are located around 35 km from
the project area. Apollo will commence an aggressive exploration program including drilling pending
all regulatory approvals which is expected to occur in the next two months.
Apollo also owns the Commonwealth Hill Project in South Australia (see attached map), which
contains three key targets highly prospective for iron ore including an iron ore deposit at Sequioa
which is located approximately 30km from the Adelaide/Darwin Railway line. Apollo's project is in the
same region as several iron ore companies including Western Plains Resources Limited and Ironclad
Mining Limited.
Completion of the Placement is consistent with a non binding Memorandum of Understanding (MoU)
signed by the parties following a recent visit to Western Australia and the Pilbara by senior
representatives of the Chinese Iron and Steel Group and Apollo. This was announced to ASX on 17
December 2007.
Under the terms of the MoU, the Chinese Iron and Steel Group has the option to subscribe for up to a
further 6.7 million Apollo shares at 34 cents per share, and Apollo will seek shareholder approval to
allow the Chinese Iron and Steel Group to take an interest of up to 19.9% in Apollo subject to relevant
approvals. The MoU also gives the ability, subject to successful exploration and development, to
negotiate in good faith an agreement giving the Chinese Iron and Steel Group the right to market iron
ore produced from its Mount Oscar Iron Ore Project
The above terms are non-binding until a definitive agreement is reached between the parties.
The Board believes completion of the placement is another key milestone in the development of
Apollo Minerals into a leading diversified resources company, with the significant backing of a
Chinese partner.
Apollo continues to review other opportunities in the iron ore sector in Australia and overseas and the
non-binding MoU with a strategic Chinese partner will provide further assistance for Apollo and its
iron ore acquisition strategy in an effort to become a significant iron ore company.
The above transactions have been completed as a result of strong support by Artemis Resources
Limited, which has a management agreement with Apollo to assist Apollo in project acquisition, and
mining and geological services. Artemis currently holds a 7% interest in Apollo and continues to
support the Company's strategy to expand its iron ore interest in Australia and overseas.

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