palmer shares, page-22

(c) Shougang Project Agreement
The Agreement entered into by Australasian and the Shougang Entities (through International
Minerals or ¡§IM¡¨) will
„h allow Shougang Entities to appoint two (2) members to the Board of International Minerals
and Australasian to appoint four (4) members to the Board
„h establish an operating committee (with equal representation)
„h See the completion of studies suitable for the financing and development of the
Project,including a full turn key construction proposal
20
Australasian Resources Limited
and its controlled entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF YEAR ENDED 31 DECEMBER 2006
Following an election to proceed with full-scale project development, Shougang Entities shall:
„h enter into the IMshareholders Joint Venture Deed with Australasian, which will govern the
operations of IMduring the development and operation of the Project
„h appoint three (3) directors to the board of IM (Australasian to appoint three (3) directors to
the board.)
„h earn a 50%interest in IM by fully funding the development of the Project (estimated at
US$2.1 billion) through an interest free project loan to IM that is repayable only out of set
percentages of the Project¡¦s free cash flow.
„h guarantee to purchase 100%of iron ore products (5 Mtpa of pellets, 5 Mtpa of concentrate
and1.5 Mtpa of Hot Briquette Iron (¡§HBI¡¨)) for 25 years based on world benchmark iron ore
prices
„h execute the construction contract for the Project using a related Shougang entity or other
suitable party