This looks good. They could tie up the China market with...

This looks good. They could tie up the China market with this.


Milestone Vanadium Off take Agreement and $22m Finance Package
Precious Metals Australia Ltd (PMA) is pleased to announce the conclusion of
a comprehensive Vanadium Sales and Marketing Agreement and an Equity
Investment Agreement with a subsidiary of leading global supply chain
manager, Noble Group Limited.
This strategic alliance between PMA and Noble will ensure that the
Windimurra project in Western Australia is a highly competitive, long life
world-class mine, producing high quality vanadium at a sustainable cost.
Vanadium Sales and Marketing Agreement
Noble Resources Limited (“Noble�) has agreed to purchase the total vanadium
output of the Windimurra mine, at prevailing market prices.
During the first seven years of production, Noble will pay a minimum price for
vanadium equal to the cash cost of producing vanadium at Windimurra based
on the forecast production schedule.
In consideration for Noble Resources entering into the Vanadium Sales and
Marketing Agreement and agreeing to pay the minimum price for vanadium,
PMA has agreed to pay Noble a once-off fee of A$10m satisfied by the issue
to Noble of 3,728,549 fully paid ordinary shares in PMA equal to 4.99% of the
shares outstanding, subject to PMA shareholder approval.
Noble will exclusively market and handle all distribution logistics for
Windimurra vanadium worldwide through its international network of offices
and will be paid a fee at commercial rates for this service. Noble’s marketing
effort will be complemented by PMA’s own marketing team
which will focus on servicing end user’s requirements, new
high-value product development and promoting Windimurra
vanadium as the product of choice.
PMA
PRECIOUS METALS
AUSTRALIA LIMITED
A.C.N. 009 131 533
Level 4, 76 Kings Park Road
West Perth
Western Australia 6005
PO Box 620
West Perth
Western Australia 6872
Telephone: +61 8 94231900
Facsimile: +61 8 94231999
http://www.pmal.com.au
The Agreement is subject to PMA board approval for development of the
Windimurra Project and entry into financing arrangements for the Project.
Equity Investment Agreement
Noble has agreed to subscribe to an unlisted, unsecured convertible note on
the following terms:
• face value of A$8,202,207;
• term of 3 years (from when funds are drawn);
• early repayment is permitted;
• convertible into 3,728,548 fully paid ordinary PMA shares, equivalent to
an issue price of A$2.20 per share;
• interest at LIBOR plus 2%;
• other standard terms.
PMA’s ability to call for payment of the face value of the note is subject to
completion of due diligence by Noble within 60 days, and approval of PMA
shareholders.
Additionally, PMA’s wholly-owned subsidiary, PMA (Windimurra) Pty Ltd, the
owner of the Windimurra Project, has granted to Noble a 60 day option to
subscribe for 9.999% of the issued share capital of PMA (Windimurra) Pty Ltd
for A$13.5 million, subject to Noble and PMA entering into a shareholders
agreement.
Upon exercising the option and issuing the convertible note, Noble will be
entitled to nominate 2 directors to the PMA board.
PMA executives have met with a large number of vanadium users world wide
who have indicated strong interest in securing reliable vanadium supply, of
higher quality and more competitive cost than has been available in recent
years. PMA chose an alliance with Noble due its financial strength, strong
reputation, market penetration in the growing Chinese market, and past
success in partnering Australian mines.
We look forward to working closely together in serving the vanadium industry
and in maximising returns to shareholders.
Yours sincerely
PRECIOUS METALS AUSTRALIA LIMITED
RODERICK SMITH
Managing Director