16/09/2009 - 10:59

Royal buys Mintech for $4.95m

16/09/2009 - 10:59

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WA based iron ore and uranium mining company Royal Resources has acquired private outfit Mintech for $4.95 million taking control of its Razorback iron project in South Australia.

Royal buys Mintech for $4.95m

WA based iron ore and uranium mining company Royal Resources has acquired private outfit Mintech for $4.95 million taking control of its Razorback iron project in South Australia.

 

Full announcemet below:

 

ROYAL SECURES MASSIVE MAGNETITE PROJECT IN SOUTH AUSTRALIA
Key Points:
 Royal has entered into an agreement to acquire Mintech Resources Pty Ltd holder of the exploration licence that covers the Razorback Iron Project


 Razorback
o is a magnetite-rich iron unit averaging ~36% Fe, but as high as 55% Fe1
o occurs in moderately dipping beds that average 100m thick
o has a very low stripping ratio as it is a topographic ridge
o is part of a stratigraphic sequence with in excess of 100km of untested strike length
o has an exploration target size of 500Mt to 1,000Mt @ 28% to 65% Fe2


 Razorback is located in South Australia whose government is highly supportive of resource development


 Existing infrastructure in place:
o the Project is situated only 40km from the Broken Hill - Pt Pirie section of the Indian-Pacific railway line
o the railway line can deliver directly into Port Pirie which has an existing railcar tippler and stockyard room
o both the rail and port are under-utilised and uncongested


 The Project occurs in an area not subject to Native Title claim
 Royal has control of the Project and an Option on two surrounding leases
 Razorback has demonstrated that it can produce a high-grade concentrate at relatively coarse grind size and with very low impurities

Agreement Overview


Royal has entered into an agreement with the shareholders of private company Mintech
Resources Pty Ltd (Mintech) to acquire 100% of the shares in Mintech for a total consideration of
$4.95 million. Mintech is holder of exploration licence EL4267, known as Razorback Ridge, in
east-central South Australia (Figure 1).


Following successful completion of the initial Due Diligence period, and within 5 days of the
signing of the agreement, a non-refundable deposit of $250,000 will be paid. Completion of the
acquisition of the shares in Mintech is conditional on Royal completing further fund raising
activities.


Royal has also retained through a consultancy agreement with FeRUS Pty. Ltd., the services of
The Hon. Peter Lewis, retired Member of the South Australian Parliament. Lewis was the principal
shareholder in Mintech and owns and controls FeRUS Pty. Ltd. The consultancy services
provided by FeRUS Pty. Ltd. will be important to assist Mintech to bring the project to Pre-
Feasibility Study (PFS) within three years, and to a Bankable Feasibility Study (BFS) within two
years of the PFS. The consultancy fees payable to FeRUS Pty. Ltd. on successfully achieving
PFS is $5 million, and on successfully achieving BFS is $20 million.

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