China Approves Centra-WISCO JV On Eyre Peninsula

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.

White Energy To Buy South Australian Coal Ltd

Deal Gives Access to 500mn Tonne Resource

New South Wales’ White Energy is to buy South Australian Coal Limited in a $A39.3 million all-share deal.

The deal will give White Energy access to SA’s 500 million-tonne coal resource at Lake Phillipson, about 60 kilometres south of Coober Pedy in the far north of the state.

White Energy MD, John Atkinson, says shareholders in SACL are reinvesting $100 million back into White Energy, which it will add to its overall funds.

"The key figures in the South Australian coal company are putting their money where their mouths are and that'll give White Energy in excess of $200 million and we'll then use funds to exploit the opportunity at Lake Phillipson and also exploit the opportunities in other coal markets," he said.

Lake Phillipson coal will also be benefit from processing by White Energy to enable it to be exported.

"That process takes high-moisture coal and effectively reduces the moisture content and creates a high-energy and high-value thermal coal out of what started as a high-moisture low-energy coal," he said.

SACL was spun-off from Felix Resources when Felix was taken over last year by Chinese state-owned Yanzhou Coal Mining last year.

Under the bid, SACL shareholders are being offered 0.07985 WEC shares for each share held. They could also receive an additional 21.61 cents per share if additional coal resources are defined in SACL's existing tenements.

Alternatively, SACL shareholders can receive 19.96 cents per share in cash, up to a maximum aggregate of all shareholders of $10 million.

SACL's independent directors have unanimously recommended the deal, in the absence of a superior proposal.

Southern Uranium In South Australian Iron Ore Discovery

South Australian minerals explorer Southern Uranium Ltd says it has identified iron ore potential at its Jungle Dam prospect on the Eyre Peninsula in South Australia.

"Of a total of nine Acacia and Southern Uranium holes with complete assays and considered to be proximal to modelled magnetic bodies, six achieved iron intersections of significant width and grades of more than 30 per cent Fe (iron)," the company said on Wednesday. "The potential for substantial thicknesses of iron mineralisation is indicated by broad or adjacent intersections at the original Jungle Dam prospect," it said.

The metals division of Shell drilled at Jungle Dam in 1985 while Acacia Resources drilled there in 1996. Southern Uranium itself did some target drilling in 2008 and 2009.