Iron ore juniors in international plays

WESTERN Australia’s junior iron ore sector has received considerable attention of late with the sale of a 19.9 per cent stake in Mt Gibson to Russian resources giant Metalloinvest, while Sundance Resources Ltd is looking to accelerate its iron ore strategy in Cameroon. The holding company of Russian billionaire Alisher Usmanov’s Metalloinvest, Gallagher Holding Ltd, will spend $98.8 million on 109.7 million Mt Gibson shares owned by London-based Cambrian Mining. The unlisted Metalloinvest is Russia’s largest iron ore producer, with approximately 39 per cent of total concentrate, pellet and hot briquette production. It is also the country’s fifth largest steel producer, with two integrated steel operations. The buy-up comes after Hong Kong investor Shanghai Merchants Holdings surprised the market when it acquired an 8.8 per cent stake in Mt Gibson and a 7.3 per cent stake in Mt Gibson’s takeover target, Aztec Resources. Shanghai recently declared Mt Gibson’s hostile takeover offer for Aztec a failure at current levels and has called on the two companies to negotiate an acceptable merger agreement. Meanwhile, Sundance’s Mbalam project in Cameroon is set to undergo a pre-feasibility study on development of its Mbalam iron ore project after the company recently appointed three mining executives to its board and a proposed $20 million capital raising. The funds will be used on the pre-feasibility study, due for completion by July 2007. The appointments include former chairman of Portman Mining Ltd and current executive chairman of Gindalbie Metals, George Jones, former managing director of Multiplex Engineering Pty Ltd, Don Lewis, and international project and infrastructure developer Dr John Saunders.

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