30/09/2008 - 15:35

Golden West share raid in Yilgarn

30/09/2008 - 15:35

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Golden West Resources Ltd will spend over $11 million subscribing to shares in Yilgarn Infrastructure Ltd in a bid to secure the construction of a railway from its iron ore project to the Oakajee port.

Golden West Resources Ltd will spend over $11 million subscribing to shares in Yilgarn Infrastructure Ltd in a bid to secure the construction of a railway from its iron ore project to the Oakajee port.

The iron ore hopeful today agreed to subscribe to 33.2 million Yilgarn shares priced at 35 cents each, giving Golden West a 19.9 per cent stake.

Yilgarn has also agreed to appoint a nominee of Golden West to its board.

"The purpose of this investment is to help secure the construction of a railway from Wiluna West to the proposed port of Oakajee," Golden West said in a statement today.

The subscription builds on the companies' agreement entered into last month, where Golden West agreed to use rail infrastructure, a berth and storage facilities to be built at the Oakajee deepwater port by Yilgarn.

That agreement follows the award of a tender by the state government to Oakajee Port and Rail Pty Ltd - backed by Murchison Metals Ltd and Mitsubishi Corp - to develop the $2 billion port.

Despite having lost the tender for the port, Yilgarn has previously stated that it has the right to build rail lines to service various iron ore mined in the region.

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