Australasian Resources Ltd (AR) is pleased to advise that the Managing Director, Mr Darren Hedley, and the president of the Chinese government owned conglomerate China Metallurgical Group Corporation (MCC), Mr Shen Heting, have formed a strategic alliance between the two companies to construct and provide finance for AR’s Balmoral South Iron Ore Project by executing a Memorandum of Understanding in Beijing. The Memorandum of Understanding provides that: • MCC will provide a commercial proposal for the construction of AR’s iron ore project; • at the request of AR, MCC will organise up to 70% of the contract price by way of debt funding; Australasian Resources Ltd Page 2 • MCC agree to provide sale and offtake of iron ore concentrate in proportion to their funding; • MCC will provide equity investment in the share capital of AR in an amount to be agreed between the parties; • AR will send its technical team to China to meet MCC’s designated special team for the project to finalise MCC’s commercial proposal for the construction of the AR project; • the Memorandum is non binding and subject to both parties board approval within 30 days. AR believes the execution of the Memorandum is clear vindication of the board’s decision to concentrate on the Chinese iron ore and energy sectors. AR has now been endorsed by the leading Chinese Government owned conglomerate in the Chinese steel industry, which has a presence across five continents. Background MCC is a large state owned conglomerate which has successfully established national iron ore centres in China. It is a major player in capital construction and has completed a number of large scale projects around the world. MCC has advised AR that over the past 10 years MCC has been responsible for the construction of 90% of all additional steel making capacity in China which has increased from 100Mtpa in 1996 to 350Mtpa in 2006. The MCC Group and subsidiaries has over 100,000 employees. MCC has in many peoples view been the major driving force behind the prosperity of the Chinese Steel Industry. Since China commenced its reforms and opened to the outside world MCC have been actively developing international markets leaving their footprint on five continents. Yours faithfully Darren Hedley Managing Director
ARH Price at posting:
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