Interview with Ian Finch Chinese take a stake in...

Interview with Ian Finch Chinese take a stake in IronClad21/04/2010 05:45PM AEST

A Chinese entity plans to take a stake in IronClad Mining Ltd and form a joint venture (JV) with the junior explorer at its Wilcherry Hill iron ore project in South Australia.

IronClad says MCCM Capital Management Co Ltd can earn a 50 per cent interest in the first stage of the project by spending $35 million, giving it the right to half of the iron ore produced during this phase.

IronClad plans to issue 4.4 million shares to MCCM to fund a bankable feasibility study underway at Wilcherry Hill, giving the Chinese firm a stake in IronClad of about nine per cent.

IronClad executive chairman Ian Finch said the deals were about bringing Wilcherry Hill into production as quickly as possible.

First ore exports are slated to commence towards the end of the year.

Under the placement, the first tranche of 2.2 million shares will be issued at $1.50 each to raise an initial $3.3 million.

A second tranche of 2.2 million shares will be issued when the parties enter a share subscription agreement, with the price of these shares to be based on IronClad's average share price over a certain period of time, Mr Finch said.

The placement requires approval by IronClad shareholders, and Australian and Chinese authorities.

Mr Finch said IronClad was in talks regarding remaining iron ore sales from Wilcherry Hill, following an offtake deal in February with China's Liuzhou Iron and Steel Co Ltd for at least one million tonnes per year (Mtpa) of direct shipping ore (DSO).

"We ... will do that on an arm's length basis to whoever gives us the best price," Mr Finch told AAP.

The first stage of the project is expected to deliver 2Mtpa of DSO for at least three years.

Stage two will target magnetite iron ore while the third stage will target both magnetite and hematite.

"I think the market may not understand that we've really only done a deal on the first five or six million tonnes," Mr Finch said.

"The perception may be out there that we've sold half the farm but we certainly haven't."

Shares in IronClad were down 11.5 cents, or 7.19 per cent, at $1.485 on Wednesday

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- I Believe that to get the mine going ASAP he has done the right deal. As he always said there are people knocking on IFE's door to get involved, and isn't this a better outcome than to try and get the subcontractors to put up 35M and be held to ransom by these contractors. This way IFE can deal with whoever they want to.

Good luck to all
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