Chinese Iron and Steel Group has increased its stake in West Perth-based iron ore hopeful, Apollo Minerals Ltd, to 11.7 per cent following a placement of $2 million at 30 cents per share.
Chinese Iron and Steel Group has increased its stake in West Perth-based iron ore hopeful, Apollo Minerals Ltd, to 11.7 per cent following a placement of $2 million at 30 cents per share.
The group has indicated it will look to increase its stake to 19.9 per cent, subject to shareholder and regulatory approval
The full Apollo announcement appears below:
Chinese Iron and Steel Group increases stake in Apollo to 11.7% - looking at a 19.9% future stake
Key points:
- Chinese Iron and Steel Group increases stake in Apollo Minerals to 11.7%
- Chinese Iron and Steel Group is seeking to increase this stake to 19.9%
- Iron ore outlook is positive with recent price increase of 65%
- Apollo is currently developing two Australian iron ore exploration projects and
intends to increase exploration and expand by acquisition
Newly listed diversified Australian resources company Apollo Minerals Ltd (ASX code: AON) ("Apollo") advises that the Chinese Iron and Steel Group has increased its stake in the Company to 11.7% following a placement of $2 million at 30 cents per share.
The Chinese strategic investor is looking to increase this stake to 19.9%, subject to shareholder and regulatory approval. The $2m placement follows the original non binding Memorandum of Understanding (MoU) signed in December 2007.
As part of the agreement in relation to the $2m placement, the parties undertake to work in good faith to establish a joint venture on the Mount Oscar Iron Ore Project on terms to be agreed and have a representative appointed to the Board.
The Board believes completion of this 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.
Under the terms agreed, the investor may subscribe for a further $2.3m in Apollo shares at 34 cents (a premium to the current market price) by 30 April 2008. On completion, Apollo's Chinese partner would have made an investment of over $5 million and obtain approximately 19% of the company.
Apollo is currently developing two iron ore projects, one in Western Australian and one in South Australia (see attached maps).
Apollo continues to review other opportunities in the iron ore sector in Australia and overseas in a time of rising iron ore prices.
Securing a strategic Chinese partner provides the Company with further assistance in its iron ore acquisition strategy to become a significant iron ore company.
Apollo's strategy to focus on iron ore comes at a time of record iron ore prices. Recent price agreements between Japanese and Korean steel makers and Vale have concluded a 65% iron ore price increase.
The outlook for iron ore prices and demand from Asia appears strong which bodes well for the development of Apollo's iron ore projects which are located close to rail, roads and port facilities and infrastructure.
