China Railway Materials Commercial strikes iron-ore deal with United Minerals
Pilbara iron ore developer United Minerals Corporation (ASX: UMC) has agreed to a A$27.2 million placement of shares to China Railway Materials Commercial, one of the top three steel buying groups in China.
China Railways will be issued 20 million shares in UMC at $1.35 per share. UMC shares closed at $1.05.
The capital raising is conditional on finalisation of a 10 year, 3 million tonnes per annum offtake agreement withChina Railways from the Railway iron ore deposit in the Pilbara.
China Railways will hold 11.38% of UMC after the placment, and will be issued with 2 million attaching 2011 options with an issue price of 10 cents per share, exerciseable at $1.35 per share.
Matthew Hogan CEO of United Mining said the agreement with China Railways will prove pivotal for the company and the development of its Railway Iron Ore Deposit in WA.
He said funds from the capital raising will enable the Railway Iron Ore Deposit to be advanced towards production.
It is expected the long term off‐take agreement will materially assist with the financing of the project, Matthew Hogan said.
The placement will require approval from the Australian Government.
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