Centrex Metals cements JV with Wuhan Iron and Steel
Centrex Metals (ASX: CXM) has signed a Supplementary Agreement with
Wuhan Iron and Steel (Group) Co (WISCO) for its Eyre Peninsula Iron Ore
Joint Venture.
The agreement was signed in Wuhan, China, on 27 April and
Centrex said that all outstanding conditions have been fulfilled for
the earlier signed agreement with WISCO.
Also, a new agreement
has been signed with WISCO to develop Centrex’s Sheep Hill Port Facility
also located on the Eyre Peninsula.
The main terms of the
Supplementary Agreement are: the inclusion of conditions resolving
WISCO’s concerns over non-ferrous mineral rights holders (Lincoln
Minerals Limited) on the Joint Venture tenements; and WISCO warranting
that all Chinese Government Approvals have been received.
As all
Conditions Precedent have now been met it is expected that completion
and financial close for the deal will occur by the end of May.
The
principal terms of the Eyre Peninsula Joint Venture are:
- WISCO
to take a 60% interest in the iron ore rights to five of Centrex’s
exploration tenements on the Eyre Peninsula, South Australia.
-
WISCO to pay Centrex A$ 51.5 million on completion (A$ 0.5 million
deposit already paid) and a further A$ 26 million on the first
anniversary of the completion (total A$ 78 million).
- WISCO to
pay four further payments of A$ 27 million if and when the JORC Inferred
Resources for the project reach 1.25Bt, 1.5Bt, 1.75Bt and 2.0Bt
respectively (up to an additional A$ 108 million).
- WISCO to
additionally sole fund the first A$ 75 million of exploration for the
Joint Venture.
- WISCO to assist with project financing for
construction.
On the back of this Joint Venture, Centrex has also
announced that it signed a Heads of Agreement (HOA) with WISCO at the
same time as the Supplementary Agreement to develop Centrex’s Sheep Hill
Port Facility also located on the Eyre Peninsula.
Principal
terms of the Sheep Hill Port HOA are:
- WISCO and Centrex to each
take a 50% share in a new incorporated Ports Company.
- The new
Ports Company to seek approvals for the development of a Cape size
vessel capable deep water port facility for use by the Parties and other
potential 3rd Party bulk commodity exporters on the Eyre Peninsula.
-
Parties agree to proceed to submit a Development Application (“DA”) for
the facility as soon as practical.
- WISCO to assist with
project financing for port construction.
Centrex Chairman David
Klingberg said “these final agreements with the highly respected Chinese
steel giant WISCO clear the way for a large exploration program and the
potential development of major mining and infrastructure on the Eyre
Peninsula."
"The benefits to Centrex, the Eyre Peninsula and the
state of South Australia are significant,” he added.
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