Shougang opens Perth offices following Australasian deal

Chinese steel producer Shougang Equities has opened an office in Perth, according to Perth-based iron ore hopeful Australasian Resources Ltd, and will transfer 12 staff to commence work on the company's Balmoral South iron ore project.

The full text of an Australasian Resources Ltd announcement is pasted below

Australasian Resources Ltd ("ARH") would like to announce that its strategic partner, steel producer Shougang, has established an office in Perth and has transferred 12 experienced operations, technical and commercial staff to commence work on the company's Balmoral South iron ore project.

ARH believes this is an indication of the significant commitment that the Shougang group has to developing the company's project in the Pilbara.

The establishment of this office in Perth precedes the visit of Chinese President, Hu Jintao, on 3 September. ARH's Managing Director, Mr Andrew Caruso has been invited by the Premier of Western Australia, Alan Carpenter MLA, to attend a State Dinner welcoming the President of China to Western Australia.

The Company looks forward to advancing the project with Shougang and discussing its enormous potential for the Chinese market with the Chinese President, Mr Hu, should the occasion arise.

Shougang - 4th largest steelmaker in China

Shougang Corporation is a major Chinese steelmaker that is based in Beijing and is owned by the Chinese government. Shougang Entities currently import over 20 million tonnes of iron ore into China for use in their steelmaking facilities and are in the process of developing a substantial new integrated steelmaking facility on a large site at Tangshan, on the northern China coast. Construction at Tangshan has commenced and will produce close to 10 Mt of steel a year starting in 2010.

The principal Shougang Entity that is party to the Project agreement is Shougang Holding (Hong Kong) Limited, which is 100% owned by Shougang Corporation.

Agreement with Shougang Entities

International Minerals Pty Ltd (IM), a 100%-owned subsidiary of ARH, executed a landmark Project agreement with Shougang Entities in March 2007 to complete studies suitable for the financing and development of its major Balmoral South Iron ore Project.

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.