Here is again for you Ralph.I have copied and pasted the Iron...

Here is again for you Ralph.

I have copied and pasted the Iron Ore MOU which was released on the 8th of May so people can familiarize themselves. The due diligence report was due out within 10 weeks of this announcement. (Which is within the next two weeks)

The Manager (Companies),
Australian Stock Exchange,
Sydney
Dear Sir,
CLUFF SIGNS INDIAN IRON ORE MOU
Four Iron Ore Mining Lease Applications, near Chitradurga in the Indian State of
Karnataka, are the subject of a Memorandum of Understanding between Cluff
Resources Pacific NL and Sai Construction, Engineers and Contractors, of
Bangalore, India.
The interests of Cluff in the proposed venture will be held by Cluff's 71% owned
subsidiary, Elephant Gold Pty Limited. The 29% is held by consultants to and
associates of Cluff.
The MOU makes provision for the establishment of a Joint Venture Company,
Karnataka Iron Ore Mining Pte Limited, in which the shares will be held in the
proportion Elephant Gold Pty Ltd 60%, Sai Constructions 40%.
Map of India Showing Location
Details of the four Mining Lease applications are listed below:
Mining Lease
Application No.
Taluk (Village) Minerals Area
AML/519/2005 Chitradura Iron Ore and
Manganese
600 acres
AML/503/2005 Holalkere Iron Ore and
Manganese
600 acres
AML/578/2005 Hosadurga Iron Ore and
manganese
1,000 acres
AML/518/2005 Chitradurga Iron Ore and
Manganese
300 acres
Approvals from various government Departments are necessary before the Mining
Leases will be granted. The entry price of Cluff to the Joint Venture is payment of
costs necessary for the processing of the Mining Lease Applications, and grant of the
Mining Leases. Departments involved include the Indian Bureau of Mines, the
Central Government, the Pollution Control Board, the Ministry of Environment and
Forestry and the State Government. Sai Construction is obliged to assist in obtaining
these consents, and to resolve any legal issues which may arise in grant of the
Mining Lease Applications.
Cluff will be carrying out due diligence on the proposed mining operation within the
next ten weeks. After Cluff’s completing its due diligence to its satisfaction, Sai
Construction shall form a company, Karnataka Iron Ore Pte Ltd. in which it has a
40% share, and Elephant Gold has a 60% share, and in which each party contributes
in proportion to their shareholding. The leases will be transferred into the name of the
new company.
After initial satisfactory due diligence Cluff will appoint two international valuers to
ascertain the value of the leases at that point in time. The average of the two
valuations will be deemed to be the value of the shareholding of Sai Construction in
Karnataka Iron Ore.
It is the intention of Sai Construction to exit the Company after the approvals are in
place, and the funding for the project has been sanctioned. This provides an
opportunity for Elephant Gold to competitively acquire the remaining equity in the iron
ore leases, giving it 100% ownership.
The entire transaction, including execution of a joint venture agreement by Elephant
Gold and Sai Constructiions, will be completed within six months, or other time which
may be agreed.
Total production of iron ore from Karnataka State was 12 million tonnes in 1996,
which was almost wholly exported in a raw state.
Banded haematite and magnetite quartzite are common rock types frequently
encountered in the Archaean greenstone belts of Karnataka. Commercially valuable
ore bodies are the result of residual concentration of iron in the banded iron formation
either through replacement of silica by iron, or leaching of silica. Such processes
acting over a long period of time have given rise to massive ore bodies occupying the
crest of hills and elevated plateaus. (See Mineral Resources of Karnataka,
B.P.Radhakrishna, Geological Society of India, 1996). Neighbouring leases mine
haematitic iron ore at an average grade of 64% Fe.
Signing of this MOU presents the Company with an opportunity to investigate
potential iron ore mine development which is aimed at generating a cash flow in the
short to medium term.
Yours sincerely,
Peter Kennewell
Managing Director