WISCO To Take Stake In Enlarged Centrex
The Chinese government has approved a joint-venture on the Eyre Peninsula in South Australia between Wuhan Iron and Steel (Wisco) and Australian iron-ore miner Centrex Metals.
All the conditions surrounding the joint venture have now been met and Centrex is targeting the deal to be closed by the end of May.
Under the terms of the agreement, Wisco will earn a 60 per cent interest in the iron-ore rights of five of Centrex’s exploration tenements on the Eye Peninsula for a total investment of A$271-million.
Wisco is to invest A$75-million of the total investment capital into sole funding of the exploration of the joint venture and will take a 15 per cent direct equity stake in the enlarged capital of Centrex.
Other points to note in the deal:
- WISCO is 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 is 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 is to additionally sole fund the first A$ 75 million of exploration for the Joint Venture.
- WISCO is to assist with project financing for construction.
The two companies have also signed a heads of agreement to develop Centrex’s Sheep Hill port facility on the peninsula which would seek approval for the development of a Cape-sized vessel capable, deep-water port facility for use by the joint-venture and other exporters.
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