If Xinyang Iron and Steel Group Company Limited were prepared to inject $23m @ $1.41 for 12.7% of the company in May '10, IMO the current share price is a steal.
"Long Term Off Take for Maryborough Project and $23M Capital Raising
Key Points * Life of Mine off take agreement with a subsidiary of Chinese steel making group Xinyang Iron and Steel Group Company Limited (Xinyang) for 65% of mine output for planned Colton mine and any additional developments at Maryborough; * This off take agreement would deliver approximately $700M in sales revenue to NEC over 10 years at current coal prices and at the initial planned production rate; * Issue of 16.315 million shares to Xinyang Group (12.7% of expanded capital base) to raise $23M; * Xinyang Group to be offered a board seat; * Capital injection provides funds to progress development of the Colton Mine; * NEC retains 100% ownership of the Maryborough project; and * Full extent of the resource base and ultimate mine size to be defined, structural and quality modelling of quality continues".
NEC Price at posting:
$1.12 Sentiment: LT Buy Disclosure: Held
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