Two Western Australian junior miners are closing in on deals to sell their iron ore projects in the Pilbara.
Two Western Australian junior miners are closing in on deals to sell their iron ore projects in the Pilbara.
West Perth-based CZR has been in a trading halt since yesterday pending an announcement of a corporate transaction over the company’s Robe Mesa iron ore project.
The Mark Creasy-backed miner plans to develop an open-pit mine, the Robe Mesa project, in the West Pilbara region of Western Australia about 70 kilometres south of the Port of Ashburton.
The Robe Mesa site operates near Strike Resources' Paulsens East iron ore project, with the companies previously collaborating to build an iron ore export hub.
Strike Resources today released a statement to the market about the share and asset sale agreement of the Paulsens East project to Miracle Iron Holdings.
Under the agreement, Miracle Iron would acquire 100 per cent of the shares in Strike’s wholly owned subsidiary, Strike Iron Ore Holding, for $20.5 million cash.
The subsidiary is the owner of Paulsens East Iron Ore, an entity that owns Strike Resources’ flagship project in the Pilbara.
Miracle Iron is a Perth-based private company owned by Chuanshui ‘Frank’ Yin, according to Strike’s ASX announcement.
“Strike is satisfied in relation to Miracle’s financial capacity to complete the transactions contemplated under the agreement, after having completed due diligence on Miracle and Mr Yin, negotiating a significant $2 million deposit (non-refundable in certain circumstances) and having sighted Miracle’s bank account statement showing sufficient funds at call to fund Miracle’s payment obligations at completion,” the announcement reads.
The company said part of the sale proceeds would pay off the $US7.2 million loan owed to Good Importing International, with the remaining to go towards Strike’s Apurimac iron ore project in Peru.
In its announcement, Strike said it would receive $20 million on completion with the remainder deferred consideration payable by Miracle on June 30.
Under the Paulsens project sale transaction, $5 million in royalties owed by Orion Equities to CXM would be paid by Miracle Iron.
Orion pays royalty to CXM for iron ore produced from Paulsens East, with the latter being a wholly owned subsidiary of Orion.
Orion executive chairman Farooq Khan is also the chair of Strike Resources.
Strike Resources shares were trading at 6.2 cents each, up 26.53 per cent as of 2.06pm AEDT today.
