working capital loan, page-3

Level 4, 5 Mill St
Perth WA 6000
PO Box 7752
Cloisters Square WA 6850
ABN 46 008 942 809 Phone: (+61 8) 9322 2288
Fax: (+61 8) 9324 2164
Email: [email protected]
www.austresources.com.au
ASX ANNOUNCEMENT
21 December 2006
The Manager
Company Announcements Office
Australian Stock Exchange Limited
4th Floor, 20 Bridge Street
SYDNEY NSW 2000
Dear Sir/Madam
WORKING CAPITAL LOAN AND COMPLETION OF
BALMORAL SOUTH PROJECT ACQUISITION
Australasian Resources Ltd (“Australasian”) is pleased to announce that Mineralogy Pty Ltd (a company controlled by Professor Clive Palmer) has agreed to provide Australasian with a $5 million working capital loan facility. The funds from this facility will allow Australasian to continue to progress its projects while it completes negotiations with potential strategic partners for the provision of a larger funding package for a definitive feasibility study and acquisition costs on the Balmoral South iron ore project.
The loan facility is repayable within 12 months, is secured by a fixed and floating charge over Australasian’s assets and bears interest at the bank bill swap bid rate plus 2%. In the event that Australasian receives proceeds from a capital raising or disposal of assets, such proceeds must be applied to the repayment of the facility.
Separately, Professor Clive Palmer has agreed to waive the funding condition on his agreement to sell International Minerals Pty Ltd (which holds the Balmoral South Project) to Australasian. Following this waiver and the approval of the acquisition by Australasian shareholders last week, all conditions outlined in the acquisition agreements have now been met.
The parties will therefore proceed to complete the agreement, which will involve:
• The transfer of 100% of the shares in International Minerals Pty Ltd to Australasian;
• The issue of the Australasian consideration shares to Mineralogy and AMHK (resulting in Mineralogy and Professor Clive Palmer becoming a 77% shareholder in Australasian); and
• The appointment of Mr Clive Mensink to the board of Australasian.
Negotiations with potential strategic funding partners for the Balmoral South Project, whilst ongoing, are simplified by the completion of the acquisition and Australasian is hopeful of concluding a suitable funding arrangement early in 2007. Australasian will apply for its shares to be reinstated to trading on the ASX as soon as such funding has been finalised.
Australasian Resources Ltd Page 2
Australasian welcomes Mr Mensink to its board and looks forward to progressing the feasibility work on the Balmoral South Project using the loan funds from Mineralogy.
Any queries can be directed to Darren Hedley on +618 9322 2288.
Darren Hedley
Managing Director