Golden West hits back at Portman

19/08/2008 - 17:14

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Golden West Resources Ltd has hit back at Portman Ltd's criticism of its acquisition of iron ore tenements, using the latter company's recent purchase of prospective iron ore ground as ammunition.

Golden West hits back at Portman

Golden West Resources Ltd has hit back at Portman Ltd's criticism of its acquisition of iron ore tenements, using the latter company's recent purchase of prospective iron ore ground as ammunition.

In a letter to shareholders, GWR director Alan Rudd responded to issues raised by Portman through a number of letters to Golden West shareholders.

The notices come ahead of a GWR shareholder meeting requisitioned by Portman which wants to replace GWR chairman Con Markopoulos and director Michael Wilson with its managing director Richard Mehan and Paul Piercy.

One of the key concerns for Portman is GWR's proposed acquisition of Joyner's Find, which forms a part of GWR's larger Wiluna West iron ore project.

Portman has long criticised and demanded answers to why GWR had paid an $820,000 non-refundable deposit to vendors of the project, which has a resource of 9.2 million tonnes at 60.5 per cent iron, without shareholder approval.

Today Mr Rudd turned the tables and brought into light Portman's recent $10 million purchase of tenements from Iron Mountain Mining Ltd which are said to be prospective for iron ore and has no defined resource.

Mr Rudd pointed out that shareholder approval was not necessary for the purchase and that Portman had made an initial payment of $3 million.

Mr Rudd's letter follows an earlier announcement made today by GWR's former predator Fairstar Resources Ltd which reiterated its support for Golden West.

GWR shareholders will meet next week to vote on resolutions proposed by Portman, including a share placement and the adoption of a new constitution.

Meanwhile the Chinese government and Australia's Foreign Investment Review Board have approved a proposed share placement by iron ore explorer Golden West Resources Ltd to China's Hunan Valin Steel Tube & Wire Co Ltd (Valin).

Golden West last week entered into a deal to supply 4.5 million tonnes of direct shipping iron ore annually to Valin for a period of 15 years.

Valin will to subscribe for 14.4 million Golden West shares at a price of $1.85 per share, raising a total of $26.64 million and giving Valin a stake of about 11.4 per cent in Golden West.

The iron ore explorer today said it had entered into separate offtake agreement, this time with China's Yijian Investment Company, for the supply of 500,000 WMT (wet metric tonnes) of direct shipping iron ore for 15 years.

"Yijian has also undertaken to subscribe for 1.6 million shares at a price of $1.85 per share, raising a total of $2.96 million," Golden West said.

The Yijian agreement is subject to regulatory approvals.

If received, Yijian will emerge with a 1.44 per cent stake in Golden West.

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