Gindalbie Metals
Limited (ASX: GBG)
ASX RELEASE
1
AUGUST 2008
$141.8M RECEIVED FOR
THIRD EQUITY INSTALMENT FOR KARARA
IRON ORE
PROJECT DEVELOPMENT
INCLUDES FIRST EQUITY
CONTRIBUTION OF A$18.38 MILLION BY GINDALBIE
Gindalbie Metals
Limited (ASX: GBG ? ?Gindalbie?) is pleased to announce the completion
of payments totaling A$141.8 million under the previously announced
equity funding arrangements for the A$1.8 billion Karara Iron Ore Project in Western
Australia. This comprises a A$123.38 million payment by
Gindalbie?s joint venture partner, Anshan Iron & Steel Group Corporation
(?AnSteel?), and Gindalbie?s first equity contribution of A$18.38 million.
The third payment by
AnSteel reinforces its commitment to the rapid funding of the project and takes
the cash balance of the joint venture company, Karara Mining Limited (KML), to
more than A$200 million to be applied to the development of the project.
?This is another
important milestone which brings the total equity payments by AnSteel to date
to approximately A$228 million,? said Gindalbie?s Managing Director, Mr Garret
Dixon.
?KML currently has
more than A$200 million in available cash reserves which will be utilized for
the ongoing pre-development activities at Karara, including final engineering
and design work and long-lead equipment items such as the recent orders
totaling approximately $70 million for two high pressure grinding rolls and
four large ball mills.?
Under the terms of
the Karara Joint Venture Development Agreement AnSteel has one final payment of
$143.68 million to make in October as part of the conditions to earn its 50%
stake in the project.
Payment
Date
|
Ansteel
(A$ m)
|
Gindalbie
(A$ m)
|
Status
|
February
2008
April
2008
July
2008
October
2008
|
50.00
55.00
123.38
143.68
|
-
-
18.38
143.68
|
?
?
?
|
Total
payments
|
372.06
|
162.06
|
|
Also as part of the
joint venture agreement Gindalbie can elect to borrow the full amount ($162.06
million) of its share of the equity contributions from AnSteel as debt. As
previously foreshadowed Gindalbie has now exercised that right and negotiations
are well advanced with the terms of the equity finance expected to be finalised
by the end of the September Quarter.
?This application to
AnSteel eliminates the need for Gindalbie to raise equity funding in the
current difficult period for financial markets,? Mr Dixon said. ?We expect that
this finance will be provided at competitive rates, reinforcing the strength of
the joint venture and the significant benefits of having a joint venture
partner with the depth and financial capacity of AnSteel.?
Securing and
underwriting the project debt is also one of AnSteel?s buy-in conditions and
advanced discussions are continuing with China Development Bank (CDB) to
provide the senior debt finance of $1.4 billion for the Karara Project. AnSteel
has a good relationship with CDB and the Joint Venture expects to have the
terms and conditions of the finance in place by later this year.
- ENDS -
Released by:
|
On behalf of:
|
Nicholas Read
Read Corporate
|
Mr Garret Dixon/Mr
Michael Weir
Managing
Director/Investor Relations Manager
|
Telephone: (+61-8)
9388-1474
|
Telephone: (+61-8)
9480-8700
|
Mobile:
(+61-8) 419 929 046
|
www.gindalbie.com.au
|
About Gindalbie Metals Ltd (ASX: GBG)
Gindalbie is well
advanced towards achieving its vision of becoming a leading independent
Australian iron ore company with a diversified portfolio of magnetite and
hematite production assets, located in the Mid West region of Western
Australia.
The initial focus of
Gindalbie?s growth strategy is the Karara Iron Ore Project, located 225km east
of Geraldton, where it will deliver initial production of Direct Shipping Ore
(DSO) hematite in 2009 to be followed by production of high grade magnetite concentrate
and blast furnace quality pellets in 2010. Karara is being developed through a
50:50 Joint Venture with Ansteel, one of China?s
leading steel and iron ore producers.
Gindalbie?s longer
term growth will be propelled by the exploration and development of its
extensive 1,900 sq km tenement portfolio, which includes numerous prospective
magnetite and hematite exploration targets expected to deliver a long-term
pipeline of growth opportunities.
For further
information, visit www.gindalbie.com.au
About Ansteel
Ansteel is currently
one of China?s largest steel producers and is the major producer in the
north-east region of China, with crude steel production of 22 million tonnes,
annual sales revenues in excess of US$11 billion and a profit of approximately
US$1.5 billion in 2006. Ansteel is considered to be one of the country?s key
growth companies and has strong government support in securing new sources of
long-term iron ore supply through international investment.
Ansteel is developing a new integrated iron and steel making facility at
Bayuquan, adjacent to the Port of Yingkou,
approximately 100km south-west of its current steel making facility in the city
of Anshan. The
new facility will have the capacity of 6.5Mtpa of finished steel products and
is the facility that the Karara products will feed upon commencement of
production.
For further information, visit www.ansteelgroup.com
READ CORPORATE
Public Relations
Corporate Communications
T: (+61-8) 9388-1474 | F: (+61-8)
9388-1472 | E: info@readcorporate.com.au | Web: www.readcorporate.com.au
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