19/09/2008 - 14:33

Market turmoil prompts Aurox review

19/09/2008 - 14:33

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The continued global financial turmoil has prompted Aurox Resources Ltd to review alternatives over project implementation for its Balla Balla titanomagnetite operation in the Pilbara.

Market turmoil prompts Aurox review

The continued global financial turmoil has prompted Aurox Resources Ltd to review alternatives over project implementation for its Balla Balla titanomagnetite operation in the Pilbara.

 

Below is the part of today's announcement:

Aurox Resources Limited [ASX Code: AXO] ("Aurox" or the "Company") continues to make significant progress in the development of its Balla Balla titanomagnetite project in the West Pilbara region of Western Australia.

The continued turmoil in debt and equity markets has dictated that the Company review its project implementation strategy. In consultation with its key advisers the Company is undertaking a broad ranging review to assess strategic alternatives to ensure that Aurox shareholder value is maximised in relation to the development of this significant resource project.

Commenting on the review the Company's managing director Mr Charles Schaus said, "The Balla Balla project is a world class iron ore deposit which also hosts substantial titanium and phosphate resources. We have long-term sales contracts in place with Chinese steel mills and have locked in long lead capital items and key infrastructure as per our commitment to investors last year.

"However we could not have anticipated the dislocation in financial markets experienced so far this year. It is not our intention to swim against the tide and accordingly we are developing strategies to ensure that value to shareholders is optimised.

"Ideally, any changes to the implementation strategy will not adversely impact on project delivery timetables, however preserving and increasing shareholder value must be our prime objective."

Notwithstanding the difficult nature of debt markets, the Company has received expressions of interest from twelve banks in relation to proposed debt funding for the Balla Balla project. Aurox and its debt advisors have selected a syndicate comprising five banks (Australian and international) in relation to project finance facilities. Bank due diligence will kick off with a site visit scheduled next week.

Aurox's current cash position is AUD36 million.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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