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Mount Gibson Iron Limited (Mount Gibson) advised ASX on 9 October 2008 that it was in discussions with a number of its customers in relation to requested delays to iron ore shipments scheduled for the quarter commencing October 2008. Three of those customers have now defaulted on their binding offtake agreements. Acceptable accommodation has been reached with a further two customers and discussions will be ongoing with a further existing customer until 9 November 2008. In response to those events, Mount Gibson has carefully reviewed all of its available options and has taken steps which mitigate the risk of further defaults and deferments while preserving its rights against its defaulting customers.
Mount Gibson is pleased to announce that it has signed a binding Heads of Agreement with its major shareholder, APAC Resources Limited (APAC), and a further binding Heads of Agreement with Shougang Concord International Enterprises Company Limited (Shougang Concord). As detailed in the attachments, these agreements provide for:
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APAC and Shougang Concord to purchase available production from Mount Gibson¡¦s operations:
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During November and December, 2008 (Short Term Offtake);
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Between January and June 2009 (Medium Term Offtake); and
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From 1 July 2009 (Long Term Offtake).
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