Aztec Resources Ltd has signed a Letter of Intent with Marubeni Corporation paving the way for an off-market agreement and the provision of financial assistance for the Koolan Island Iron Ore project.
The Letter of Intent represents further definition of agreements set out in the Memorandum of Understanding signed by the two parties in December 2004.
Under the terms of the Letter of Intent, Marubeni and Aztec have expressed:
-intent for Aztec to supply 1.0 to 1.5 million tonnes per annum of high grade Koolan Island iron ore, over the life of the project to Marubeni. The ore will be consumed primarily by integrated steel mills in Japan and Asia. Formal supply agreement terms will be based on mutual agreement on the detailed conditions of the purchase of Koolan Island iron ore and approval by the purchasers' Board; and
-intent by Marubeni to extend financial assistance for the timely development and construction of the Koolan Island Project of up to A$20 million (subject to mutual agreement with Marubeni and its board approval).
Aztec now has buyers committed to take all iron ore produced from its proposed 4 million tonne per annum iron ore mine at Koolan Island, Western Australia for the life of the Project.
With strong commitment for the iron ore tonnages and continuing buyer interest in Koolan Iron Ore, Aztec believes it can be the next producer of high grade iron ore, with first shipments anticipated in late 2006.
The non renounceable entitlement issue, announced in December, to raise $42.3 million, fully underwritten by LCS Capital and Grange Securities, and the support of Marubeni will enable Aztec to complete a majority of the required funding for the Project.
Commercial details will be provided on the completion of formal contract negotiations.
