Grange signs with Patrick for Albany Port infrastructure study

Perth-based minerals explorer Grange Resources Ltd has signed a memorandum of understanding with Patrick Port Services to study the $300 million development of pipeline and port infrastructure for its Southdown Magnetite Project.

The study will look at building a filter plant, storage shed, product handling conveyor systems, shiploader and jetty at the Albany Port, with construction due to start next year.

The full text of a Grange announcement is pasted below

Grange Resources Limited (ASX:GRR) ("Grange") is pleased to announce the signing of an exclusive Memorandum of Understanding ("MOU") with Patrick Ports ("Patrick") on the development of product handling infrastructure relating to the Southdown Magnetite Project at Albany in Western Australia.

Grange and Patrick have agreed that they will work together to explore an appropriate contractual relationship to allow for the development, construction and operation of parts of the infrastructure required for the Project. A variety of contractual relationships are under consideration which could result in substantial up-front capital cost savings to the Southdown Magnetite Project.

Elements of the infrastructure that are being considered under the MOU include the magnetite concentrate slurry and return water pipeline systems and all Albany Port infrastructure including the filter plant, storage shed, product handling conveyor systems, shiploader and jetty. The current combined capital cost of this infrastructure is approximately A$300 million.

Patrick is Australia's leading provider of port based bulk handling facilities, operating in over 20 ports, including existing bulk handling facilities at Albany.

Commenting on the MOU, Grange's Chairman Anthony Bohnenn said the arrangement with Patrick offered Grange and its partners the potential to achieve substantial capital costs savings for the Project.

"We are very pleased to be in discussions with such an experienced and reliable operator, so that we can work towards constructing the most state-of-the-art, reliable and efficient handling facilities possible at the Albany Port, " said Mr Bohnenn.

"The MOU contemplates Patrick looking after all product handling from the Southdown mine site onto the ships in Albany Port, which is of great benefit to Grange," he said, "We have been in dialogue with Patrick for some time and are pleased to reach this agreement with them."

"The MOU announced today continues our progress towards project completion in late 2010, following from our recent Joint Venture agreement with Sojitz. We continue to work closely with Sojitz to complete pre-commitment development activities, as well as to explore suitable project financing options."

Grange looks forward to commencing construction in 2008, with first production scheduled to be shipped through the expanded Albany Port in late 2010.