Mt Gibson gets $40m after Asian Iron escrow lifted

Mount Gibson Iron Ltd and its subsidiary Mount Gibson Mining Ltd will receive $40 million in proceeds from the sale of their combined 73 per cent interest in Asia Iron Holdings Ltd immediately, following its release from escrow.

The proceeds from the sale, to minority shareholder Sinom Investments Ltd, were to be held in escrow until environmental approval for the project was granted. However Sinom has forfeited this arrangement with today's payment

Under the agreement, Sinom has agreed to immediately release the first $40 million being held in escrow to Mount Gibson, with the balance of $12.5 million to be released to Mount Gibson by no later than 31 May 2007.

A decision on environmental approval is anticipated by the end of 2006.

The full text of a Mount Gibson announcement is pasted below

Mount Gibson Iron Ltd is pleased to advise that it has entered into a further agreement with Sinom Investments Ltd relating to the $52.5 million sale of its and Mount Gibson Mining Ltd's 73% interest in Asia Iron Holdings Ltd.

Under the agreement, Sinom has agreed to immediately release the first $40 million being held in escrow to Mount Gibson, with the balance of $12.5 million to be released to Mount Gibson by no later than 31 May 2007.

As a result of this agreement, the 30 November 2007 deadline for obtaining environmental approval is removed and Sinom will no longer be entitled to terminate the original agreement and return the sale shares if the environmental deadline is not met.