11/07/2008 - 10:32

WA health firm steps into resources

11/07/2008 - 10:32

Bookmark

Upgrade your subscription to use this feature.

Burswood-based surgery technology company NSL Health Ltd will switch focus to the resources sector later this year after entering into a merger agreement with unlisted company Iron Ore Hill Ltd.

Burswood-based surgery technology company NSL Health Ltd will switch focus to the resources sector later this year after entering into a merger agreement with unlisted company Iron Ore Hill Ltd.

The merger will create an Indian focused-explorer with a market capitalisation of more than $125 million and cash reserves in excess of $25 million, NSL said.

Iron Hill holds the rights to an Indian magnetite project that has an exploration potential of 500-770 million tonnes of iron, and an upside target of 1.2 billion tonnes.

NSL's interest in resources was first flagged in October last year when it said it would spend between $300,000 and $400,000 to earn a 25 per cent interest in Iron Ore Hills.

At completion of the merger, which is expected in October, NSL will be re-badged as Iron Ore Hill to reflect its new direction.

A copy of the announcement is below:

NSL Health Limited (ASX:NSL) has entered into a conditional merger agreement with Iron Ore Hill Limited.

As part of the merger, a major capital raising is planned.

The merger will create a group with a market capitalisation in excess of $125 million and a structure that has no debt with cash in excess of $25 million.

Iron Ore Hill Limited has secured rights to an Indian Magnetite project that has an Exploration Potential of 500Mt to 770Mt grading 25-35% Fe, with an upside target of 1.2 billion metric tonnes.

The directors of NSL Health Limited (NSL or Company, ASX:NSL) are pleased to announce the Company has entered into a conditional merger implementation agreement for the merger of the Company and Iron Ore Hill Limited (IOH) under which NSL will make offers to acquire all of the issued shares in IOH (Merger) and adopt the Iron Ore Hill Limited name.

IOH was formed when the operations of Austind Iron Ore Pty Ltd (AIO) were restructured. Before or at completion of the Merger, IOH will hold all of the interests previously owned by AIO in relation to the Kerala Iron Ore Project (which
is hereafter referred to as the "Iron Ore Hills Project"). For ease of reference, the term "IOH" will be used in this announcement to denote either IOH or AIO.

NSL's interest in IOH was first flagged last October when it said it would spend a minimum of $300,000 and up to $400,000 to earn a 25% interest in the Iron Ore Hills Project.

The change in focus of NSL from surgery and technological services to the exploration/mining of iron ore will involve a significant change in the nature and scale of NSL's activities and accordingly, NSL will need to re-comply with Chapters 1 and 2 of the ASX Listing Rules if the proposal is approved by NSL shareholders.

After completion of the Merger, expected to be finalised in October, NSL will change its name to "Iron Ore Hill Limited" to more accurately reflect the nature of the new activities of the Company.

"The iron ore market is buoyant at present and driven in large by appetite for steel in China and India. Demand for steel has increased significantly in recent years and is largely driven by a construction and infrastructure boom resulting from economic prosperity in these countries. As a result of this demand, we have seen recent price increases won by the major Australian producers and significant interest being shown by the Chinese wanting to take up equity in emerging Western Australian producers," NSL Chairman Mr Peter Wall said today.

"We believe the Iron Ore Hills Project in Kerala offers potential to fast track a major iron ore project to development. The Indian market is growing and if the country is able to source some of its steel-making requirements domestically, it puts us in a very good position.

"Historical analysis has confirmed that the magnetite ore from the project area can be upgraded through beneficiation to a concentrate containing over 65%+ Fe with a recovery of about 85% Fe and this is another positive for us," Mr Wall said.

Results from the data review and exploration work undertaken by IOH to date have been very encouraging and suggest that a major new magnetite mineralised (+/- hematite and limonite) target of over 500Mt to 770Mt grading
25% to 35% Fe1 occurs at the Iron Ore Hills Project with higher grade Fe zones being found in, but not exclusive to, magnetite rich gneiss units containing Quartz, Grunerite and Diopside (MQGD) host rocks.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options