Further Chinese Committment to Balmoral Project Area
Friday, August 31st, 2007
Australian based resources company Australasian Resources Ltd (â€œAustralasianâ€) has been informed by Mineralogy Pty Ltd that CITIC Pacific Ltd (â€œCITICâ€) wishes to proceed with the immediate development of a second 1 billion tonne project at Balmoral, in the Pilbara region of Western Australia.
The inclusion of a second project increases planned export production for CITIC to 24 million tonnes per annum from the Central Block of the Balmoral Project, which is adjacent to Australasianâ€™s Balmoral South Project.
In April 2006, CITIC signed a deal with Mineralogy Pty Ltd for the initial right to mine one billion tonnes of magnetite iron ore from the Central Block of the Balmoral Project, with options for an additional five billion tonnes.
Under its agreement with Mineralogy, CITIC will develop a port at Cape Preston and other related infrastructure facilities, which Australasian will have access to on a capital and operating shared cost basis.
Mineralogy Chairman and Australasian major shareholder Professor Clive Palmer has advised the Australasian board that draft agreements for the second project have been prepared and are expected to be executed in the next two to three weeks. He, along with the Australasian board, believes the development of the second project demonstrates the substantial commitment of the Chinese investment community to magnetite projects in Western Australia.
The development of the second project is subject to the approval of both the CITIC shareholders and the Treasurer of Australia.
CITIC recently announced that with the development of the second project the general Contract sum for the construction contract, entered into with China Metallurgical Group Corp (MCC) to design, construct and install infrastructure, will be US$1,750 million.
They also confirmed that it has entered into a Sale and Purchase Agreement with MCC whereby MCC will acquire 20 per cent of CITICâ€™s interest in their Projects.
Australasian Managing Director Andrew Caruso believes the confirmation of the CITIC agreement is good news for Australasian and its shareholders.
â€œThe CITIC decision to proceed to development of a second project provides further strong endorsement to the quality of the Balmoral iron ore area and gives additional confidence towards the development of our Project.â€