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| WISCO To Earn In Its Third Iron Ore Project In South Australia |
| = Hawks Nest magnetite deposits of Western Plains Resources Ltd = |
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Australian Western Plains Resources Ltd (WPG) has lately announced that WPG and Wuhan Iron & Steel (Group) Co (WISCO) of China have entered into a legally binding heads of agreement pursuant to which WISCO will earn a 50% interest in WPG's Hawks Nest magnetite deposits, located south of Coober Pedy in South Australia. The key terms of the farm-in and joint venture are reported to be as follows: -- WISCO has agreed to sole fund a minium commitment of $25 million to earn a 50% participating interest in the joint venture; -- This amount will be spent on a bankable feasibility study (BFS) for the development of one or more of WPG's magnetite deposits at Hawks Nest; -- If after the minimum commitment of $25 million has been spent the parties agree that further exploration or BFS work is required, or alternatively if the parties agree to commit to project development without further exploration or BFS studies, WISCO will sole fund the next $20 million without increasing its 50% participating interest in the joint venture; -- If WISCO withdraws from the joint venture after the minimum commitment has been spent but before commitment to project development is taken, WISCO's participating interest will be diluted on a sliding scale, such that if WISCO's expenditure is capped at $25 million, its participating interest will be reduced to approximately 28%; -- WPG will be the manager of the joint venture at all times; -- WISCO will assist WPG to secure funding for WPG's share of the capital expenditure required to bring the project into production; -- WISCO will subscribe for approximately 12.1 million new WPG shares at a price of $0.25 per share for a total amount of approximately $3 million; -- WISCO will be entitled to nominate one suitably qualified person to join WPG's board; -- WISCO will be granted a right to purchase 50% of WPG's share of magnetite concentrate production on arms-length terms; and -- WPG and WISCO will cooperate in relation to the early development of the proposed new iron ore export facility at Port Bonython. |
| last modified : Mon 18 May, 2009 [12:23] |
