additional 1 billion tonne magnetite

CITIC SIGNS AGREEMENTS WITH MINERALOGY AND OTHERS FOR ADDITIONAL 1 BILLION TONNE MAGNETITE PROJECT
Australian based resources company Australasian Resources Ltd (“Australasian” or “Company”) has been informed by Mineralogy Pty Ltd (“Mineralogy”) that CITIC Pacific Ltd (“CITIC”) has concluded agreements with Mineralogy and Professor Clive Palmer to acquire Korean Steel Pty Ltd (Korean).
Korean has the rights to develop a second 1 billion tonne project at Balmoral, in the Pilbara region of Western Australia. Korean has the right to mine 1 billion tones of magnetite ore and is a party to the State Agreement which was ratified by the Western Australian parliament as the Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Act 2002.
Mineralogy Chairman and Australasian major shareholder Professor Clive Palmer has confirmed that the second 1 billion tonne project has been acquired by CITIC for over US$200,000,000 (US$200 million) plus ongoing annual royalty payments to Mineralogy. Australasian Resources retained KPMG to value a similar transaction which they have valued the Net Present Value (NPV) as A$1.5 – A$2 billion. This transaction together with Mr Palmer’s earlier transaction with CITIC last year will mean that he has extracted a NPV in the order of over A$3 billion dollars in the last twelve months. This does not include Australasian’s current project and or his shareholdings in the Company.
The inclusion of a second project increases planned export production for CITIC to 24 million tonnes per annum from the Central Block of the Balmoral Project, which is adjacent to Australasian’s Balmoral South Project.
Under its agreement with Mineralogy, CITIC will develop a port at Cape Preston and other related infrastructure facilities, which Australasian will have access to on a capital and operating shared cost basis.
Australasian Managing Director Andrew Caruso believes the execution of the CITIC agreement is further good news for Australasian and its shareholders.
“CITIC’s decision emphasizes the quality of the Balmoral projects at Cape Preston. It underpins our belief that the area will become a world-class iron ore province in coming years.”
Caruso went on to say, “on the basis that Shougang elects to proceed with our 12 Mtpa project in 2008, we will see up to 36 Mtpa of high quality iron ore products being shipped from the port.”
ENDS