Mystery Chinese group ups Apollo stakeEmail Print Normal font...

Mystery Chinese group ups Apollo stake
Email Print Normal font Large font AdvertisementApril 29, 2008 - 4:45PM

Apollo Minerals shares have jumped more than 24% after a mystery Chinese group advised it would increase its stake in the iron ore explorer.

Apollo said today that Hugo Natural Enterprises, a company domiciled in the tax haven of the British Virgin Islands, had advised the explorer it would increase its stake to 19.9%.

Hugo, which is backed by an unidentified ''Chinese iron and steel group'' according to Apollo, is increasing its interest from 12%.

Shares in Apollo surged 6.5 cents, or 24.53%, to close at 33 cents.

The mystery Chinese group acquired an initial stake in Apollo in December and flagged increasing that interest to 19.9%, subject to shareholder and regulatory approval.

Apollo has signed a non-binding memorandum of understanding giving the Chinese group the right to market iron ore produced from the explorers Mount Oscar project in the Pilbara, subject to successful development.

Mount Oscar is in the very early stages with high grade and low grade targets identified at the project.

Apollo director Barry Woodhouse declined to reveal the identity of the Chinese steel and iron group.

''It's represented by Hugo Natural Enterprises and that's pretty much all we can tell you,'' Mr Woodhouse told AAP.

Chinese steelmakers and commodity traders are keen to cut dependence on Rio Tinto and BHP Billiton amid rising prices for iron ore and have been forming joint ventures with junior companies across WA.

Iron ore miner Mount Gibson Iron, junior explorer's Australasian Resources and Gindalbie Metals have formed joint ventures or attracted large Chinese group's to their share registers, while Sinosteel Corporation, China's largest iron ore trader, is attempting a $1.2 billion takeover of miner Midwest Corporation.

AAP