Australasian Resources raises $56 million, issues $42 million of...

Australasian Resources raises $56 million, issues $42 million of options exercisable at $1.50 per share, and forms strategic alliance with Shougang Group companies…
Australasian Resources Limited (“ARH”) today inked a major deal with one of Chinas leading steel makers Shougang Corporation which has every likelihood of catapulting the company to the top of the ladder amongst the emerging iron ore players in the Australian and world magnetite market. The first chapter of the story commences with an agreed placement of 12.8% of the expanded capital of the Company, raising $56M from entities associated with the Chinese major. As a part of the share subscription agreements, it is highly likely another $42M will end up in Australasian’s coffers through 28M attaching options at a 30% premium to the company’s last closing price.
Understandably, the company’s Managing Director Mr Darren Hedley was delighted with the result and provided the following comments in Perth today ”The Placement has been made as part of a strategic alliance between the Shougang group of companies and Australasian. There is a clear business case why this match has every reason to be very lucrative for all parties. When a company with the reputation, iron ore know how and asset backing as Shougang has, injects $56M into the Company, including an option for a further $42M at a premium price, it sends a clear message to the investing public that this asset and the Company is going places.”
The placements were made with two Hong Kong Listed Entities; Shougang Concord International Enterprise Company Limited who are effectively 47% owned by Shougang Corporation in China, together with APAC Resources Limited of which Shougang owns 18% of their issued capital. APAC will be entitled to nominate a representative on the board of Australasian.
Shougang Corporation is a major Chinese steelmaker that is based in Beijing and is 100% owned by the Chinese government. Shougang Entities currently import over 20 million tonnes of iron ore into China for use in their steelmaking facilities and are in the process of developing a substantial new integrated steelmaking facility on a large site at Tangshan, on the northern coast of China. Construction at Tangshan has commenced and will produce close to 10 million tonnes of steel a year commencing in 2010.
ARH will now be focussed on advancing the iron ore project in accordance with further arrangements (see ASX announcement and additional press release) that forms the second and most exciting chapter of this story, which provides the mechanism through which Australasian and Shougang can jointly develop the project.
ARH’s Board and management would like to thank shareholders for their patience whilst these landmark agreements were negotiated and welcomes the Shougang entities to the share registry and board of the company. Mr Hedley closed by saying he “looks forward to continuing his association with Shougang and their people and expects huge advances with the projects development in the coming months”.
Further Information
Further information can be obtained from the ASX Announcement made today and our website www.austresources.com.au.
Enquiries can also be directed to Mr Darren Hedley on +61 8 9322 2288.