mineralogy and citic pacific settlement completed

NEWS RELEASE
6 July 2006
ABN 46 008 942 809
Level 4, 5 Mill St Phone: (+61 8) 9322 2288
MINERALOGY AND CITIC PACIFIC SETTLEMENT COMPLETED
Aspiring iron ore miner Australasian Resources Ltd (ASX Code: ARH) is poised to benefit from news today that the deal between CITIC Pacific and Mineralogy has been completed.
CITIC today presented its first payment of US$215 million to Professor Clive Palmer’s Mineralogy group for the rights to mine the first 1 billion tonnes of magnetite at the Balmoral deposit in the Pilbara. The CITIC agreement also allows for further royalty payments to Mineralogy based on annual export production from Balmoral, which are expected to be worth $A100 million per annum for up to 25 years based on today’s iron ore benchmark prices.
Managing Director of Australasian Resources, Mr Darren Hedley believes that “this transaction will provide the impetus in coming weeks for the company to finalise the terms of its exclusive negotiating and due diligence agreement with Mineralogy”.
Mr Hedley also stated that “the completion of this transaction follows on from last week’s approval by the Foreign Investment Review Board for CITIC to develop part of the massive Balmoral magnetite deposit”.
An agreement with Mineralogy would provide Australasian Resources with the rights to mine 1 billion tonnes of iron ore on part of the adjoining “southern block” at the Balmoral deposit.
The Company announced a first stage resource of 619Mt in May 2006. Drilling is continuing at the “Southern Block” at Balmoral and Hedley stated “Australasian is confident they will define 1 billion tonnes in the next couple of months.”
Hedley concluded by saying “the settlement of the US$215M transaction today represents one of the most significant investments in recent times by a Chinese backed corporation into the WA iron ore mining industry and confirms the quality of the Balmoral orebodies.”
Any queries can be directed to Darren Hedley on +61 8 9322 2288.
Perth WA 6000 Fax: (+61 8) 9324 2164