Queensland billionaire Clive Palmer is trying to breathe life into his majority owned, struggling Australasian Resources, announcing he had agreed on a structure to develop the company's Balmoral South iron ore project in the Pilbara.
Although light on detail, Australasian said the "agreed structure" included a non-binding memorandum of understanding with Mr Palmer, its 68 per cent shareholder, to double the amount of iron ore it could mine from Mr Palmer's Pilbara tenements to two billion tonnes of magnetite.
In addition, Royal Bank of Scotland is working with Mr Palmer's private company Mineralogy on a $US500 million bond issue to help fund development of Balmoral South while China Metallurgical Group Corporation (MCC) has agreed to assist Australasian "to raise 75 per cent of the project costs by way of export credit from Chinese banks".
Part of the arrangement with MCC will see it appointed as engineering, construction and procurement contractor for Balmoral South.
Australasian said it was updating the financial model for Balmoral South - which had previously carried a $2.7 billion development tag - and would release the new figures "as soon as they are to hand".
Australasian is expected to use some of the infrastructure including a port being built by CITIC Pacific at the neighbouring Sino Iron magnetite development at Cape Preston, which is also based on rights to mine iron ore from Palmer-controlled tenements.
Australasian shares were up seven cents, or 42.42 per cent, to 23.5 cents at 1.05pm.
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ARH Price at posting:
24.0¢ Sentiment: None Disclosure: Held
