not long now, page-5

Must be an announcement one way or the other Monday???

Project Funding
Home > Our Projects > Karara Iron Ore Project > Project Funding

In February 2008, Gindalbie and AnSteel executed a landmark Subscription Agreement which finalised the funding structure for the A$534 million (30%) equity component of the A$1.8 billion Karara Iron Ore Project.

The financing terms of the Subscription Agreement are generally consistent with the original Karara Joint Venture Feasibility Study Agreement with the Project proposed to be funded on a 70/30 debt to equity ratio.

To earn its 50% stake in Karara AnSteel must:
• arrange and underwrite the project debt;
• provide 75% of the equity funding;
• debt finance Gindalbie’s share of equity if required; and
• provide off-take for 100% of production (minimum 11Mtpa)

The schedule of equity subscription payments is as follows:

Payment Date Ansteel (A$ m) Gindalbie (A$ m)
February 2008
April 2008
July 2008
October 2008 50.00
55.00
123.38
143.68 -
-
18.38
143.68
Total payments 372.06 162.06

The equity funding agreement reflects AnSteel’s strong commitment to the rapid development of Karara and reinforces the strong funding position of the Joint Venture – with both the debt and equity components effectively underwritten by AnSteel.

The Joint Venture has also started detailed discussions with China Development Bank to provide Project Finance in the order of A$1.3 billion at competitive rates.

The Joint Venture aims to have committed finance, underwritten by AnSteel, in place by the end of September 2008.

The Subscription Agreement mitigates project financing risk for the overall project, with Ansteel giving an undertaking to effectively fund the entire project.