Admiralty Resources Chilean JV Co. Signs Major Sales
Agreement with US-based COMETALS
COMETALS to buy minimum of 1.5 million tonnes per annum of iron ore over five years
Admiralty Resources NL [ASX: ADY] today announces that Compania Minera Santa Barbara (CMSB), its 50% owned iron ore joint venture company in Chile, has signed an agreement with Cometals, a division of iron and steel manufacturer CMC, which is listed on the NYSE with a market capitalisation of some USD$1.84 billion. Under the agreement, which follows on from the MOU announced on 23 February 2005, Cometals will purchase from CMSB a minimumof 1.5 million and a maximum of 3 million tonnes of iron ore per annum, over a minimum five-year period. Admiralty Executive Chairman and CEO, Phillip Thomas, said the agreement was a key strategic milestone for CMSB that demonstrated the enormous potential of the company’s iron ore assets. Revenue At the current CIF iron ore price of USD$72 per tonne, post the 71% price increase that comes into effect for Brazilian ore in April 2005, CMSB’s agreement with Cometals has a value of USD$72m (AUD$90m) per annum per million tonnes of ore shipped. Earnings Per Share ADY expects to generate USD$13m to USD$15m per annum per one million tonne of ore sold in EBIT distributions from the CMSB joint venture. CMSB has established an office in Vallenar, in northern Chile, and the first shipment of ore from its mines is scheduled for September this year.
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