Sydney - Wednesday - Sep 10: (RWE Australian Business News) -...

Sydney - Wednesday - Sep 10: (RWE Australian Business News) - Ferrowest Ltd (FWL) reports negotiations with the first cornerstone product offtake and investment partner for the proposed Yalgoo Iron Project are "proceeding well" and are "at an advanced stage".

"The process of securing the right partners for the project has taken longer than expected but given the pivotal role these major corporations will play in ensuring the success of this exciting and innovative project, the company is keen to ensure that the deals are concluded with the right parties on the best possible terms.

"Current negotiations with the proposed cornerstone partner include funding to complete the studies into the project, merchant pig iron (MPI) offtake arrangements and proposed participation in the funding of construction of the project," directors said.

The company previously advised the market that it expected the first of these agreements would be executed before the end of the current quarter.

The directors today said it was not clear if that goal would be achieved but they remained confident that "it will be close".

They warned that the delays in the process might also have some effect on the timeline of the project itself.

Discussions are also progressing with other potential offtake partners (other MPI consumers) that are seeking some of the expanded production from the 1mtpa production option for the project that was announced on July 8.

Meanwhile, the company has received strong interest from third parties wishing to participate in the exploration and, if feasible, development of the haematite direct shipping iron ore prospect (called the Western Haematite Prospect) that Ferrowest discovered on its Yogi tenements, 14km east of Yalgoo in the Mid-West of Western Australia.