Chinese steel producer Shougang has completed the first phase of a development review of Perth-based Australasian Resources Ltd's Balmoral South project, the iron ore hopeful has announced.
Chinese steel producer Shougang has completed the first phase of a development review of Perth-based Australasian Resources Ltd's Balmoral South project, the iron ore hopeful has announced.
The full text of an Australasian announcement is pasted below
Australasian Resources Ltd ("Australasian" or "the company") confirms that representatives from entities associated with its strategic partner, Chinese steel producer Shougang, have successfully completed the first phase of their technical, operational and commercial review associated with the development of the Balmoral South Iron Ore Project, located in the Pilbara region of Western Australia.
With this first phase now complete the twelve Shougang representatives, who have been working closely with the Australasian staff and consultants on the current study since they arrived in Australia 6 weeks ago, will head back to China for a period of approximately one month. They are scheduled to return later in the year.
Their return to China will allow them to further review the data collected during their visit and prepare for the next phase of work towards completion of the study.
During their time in Perth, the Shougang team completed the following key tasks in association with Australasian:
- established a Shougang office in Perth;
- conducted numerous site visits, including an extensive review of drilling and sampling practices on site;
- hosted a visit with representatives of the Export Import Bank of China (EXIM);
- contributed to geological, mining, process and infrastructure studies in progress; and
- proposed a verification test work regime to test orebody samples in China.
Commenting on the successful completion of this first phase of work, Shougang representative Mr Chen said: "We remain confident of the technical and operational aspects of the Balmoral South Iron Ore Project, however it was important for Shougang to spend time working with Australasian going through some of the specific details to ensure we are all on-track."
"We are very comfortable with the results achieved and the way the project is developing. We have established as strong working relationship, one which we believe will be instrumental in the development of the Balmoral South Iron Ore Project."
Shougang Agreements
In March 2007 International Minerals Pty Ltd (IM), a 100%-owned subsidiary of Australasian, executed a landmark Project agreement with Shougang Entities to complete studies suitable for the financing and development of its major Balmoral South Iron ore Project.
This agreement saw Shougang Entities take a 12.8% stake in Australasian via a placement that raised A$56M for the company.
Following an election to proceed with full-scale project development, Shougang Entities shall earn a 50% interest in IM by:
- Finance 100% of the Project funding (estimated at US$2.1 billion) through an interest free project loan,
- Guarantee to purchase 100% of iron ore products from the Project
- Construct the Project using a related Shougang entity or other suitable party.
