weak response to positive annoucement, page-15

Neil Dowling

May 11, 2009 11:06am
CENTREX Metals has reached a deal with its Chinese partner which will boost funding and speed up its South Australian projects.

The deal gives Wuhan Iron and Steel a 60 per cent slice of Centrex's iron ore projects spread along the South Australian coast around Port Lincoln.

But it also means more cash to fast-track the project.

Centrex today elaborated on Wuhan's share increase and reported that in return the Chinese company would pay it a total of $186 million once exploration infers a 2 billion tonne resource.

The previous agreement totalled $180 million.

Wuhan has also increased its obligation to a share placement that will cost it $10 million and give it 15 per cent of Centrex.

Wuhan has also agreed to arrange project financing, taking it out of Centrex's hands, and pay $75 million to cover exploration and study costs.

The new arrangements also include a joint venture to develop a deep water port facility at nearby Sheep Hill.

StateOne Equities analyst Sam Berridge says it is a great boost to Centrex's activities and was another example of China's investment into Australian companies.

http://www.news.com.au/perthnow/story/0,21598,25460684-5017963,00.html