Palmer forced to find new partner for Cape Preston17th July...

Palmer forced to find new partner for Cape Preston
17th July 2009, 13:30 WST

Talks between the Clive Palmer-controlled Australasian Resources and Chinese steel group Shougang over development of a $2.7 billion magnetite project at Cape Preston in the Pilbara have collapsed.

Australasian has just confirmed weeks of speculation regarding the state of the talks with Shougang by declaring it was instead pursuing talks with other parties to try to secure a partner for its Balmoral South project.

The failure to reach an agreement with Shougang is a big blow for Australasian, which needs a cashed-up partner like the Chinese group to fund development of the ambitious project.

Shougang had originally been signed up to arrange finance for the project, which covers a one billion-tonne magnetite resource.

Australasian managing director Andrew Caruso said today he remained confident mine site construction could start next year if a new partner could be found.

“The company remains confident about the viability of the project,” Mr Caruso said.

The magnetite hopeful’s shares, which have been suspended from trading since the start of this month, are due to resume trading this afternoon.

They last traded at 54¢.

PETER KLINGER

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