Sichuan Taifeng’s Cairn Hill Investment Clears Final Hurdle - $15 Million Received
South Australian iron ore producer, IMX Resources Limited (ASX:IXR) is pleased to announce that $15m of Sichuan Taifeng’s total investment of $23.989 million in Cairn Hill has now been received by the IMX Group.
Following Australian FIRB approval, Sichuan Taifeng has now received the Chinese NRDC approval for its investment in Outback Iron Pty Ltd (Outback Iron). Commerce Department approval has been received for the remittance of the first tranche of $15m for its investment to acquire 49% of Outback Iron, the IMX subsidiary which holds the Cairn Hill operations and Cairn Hill ML6303.
The $15m received represents the first tranche of the investment under the Heads of Agreement (HOA) signed in December 2009 (ASX Announcement 4 January 2010). The next tranche of $5m is expected to be approved by the Department of Commerce shortly and the funds received around the end of October. Sichuan Taifeng have advanced to IMX $3 million of this second tranche in advance of the Chinese approvals.
The final tranche of $3,988,888 is due on 15 January 2011, six months after the final FIRB approval.
IMX Managing Director Duncan McBain said “With Sichuan Taifeng’s strong commitment to the project, Cairn Hill Phase 1 is well on the way to its first shipment in early December.”
“IMX and Sichuan Taifeng will shortly commence the resource infill drilling as a first step of the Phase 2 feasibility study,” he said.
Sichuan Taifeng are in the process of being issued with shares equivalent to a 49% equity holding in Outback Iron.
The board of Outback Iron will be reconstituted in accordance with HOA with the appointment of two representatives from Sichuan Taifeng and two representatives from IMX. In accordance with the HOA and FIRB / Department of Defence requirements one of the IMX representatives will be appointed Chairman of Outback Iron.
IMX has been funding the development and operations of the Cairn Hill project through intercompany loans to Outback Iron. Outback Iron will repay the intercompany loans incurred since 1 January 2010 from the funds received and due to be received from Sichuan Taifeng. The exact amount will be subject to verification, but is estimated to be approximately $16.2m.
IMX / Sichuan Taifeng will commence the drilling program at Phase 2 in October as part of a strategy to fast track the Phase 2 feasibility study.