Emergent Resource receives approval for $200 million joint venture with CMIC
Emergent Resources (ASX: EMG) has reported that the Foreign Investment
Review Board (FIRB) has confirmed the approval of the company’s A$200
million joint venture with Chinese State Owned Enterprise Beijing China
Metallurgical Investment Company Ltd (CMIC)
for the development of
Emergent’s Beyondie Iron Project in the Mid West region of Western
Australia.
In a statement the company said this represents a
significant step in the development of the Beyondie Project.
The
FIRB approval follows the signing of a Binding Agreement between
Emergent and CMIC last October to proceed with the A$200 million 50:50
joint venture to develop the Beyondie Project.
Emergent’s
Chairman, George McMaster said that he welcomed the FIRB approval
decision by the Commonwealth Government.
“The FIRB approval
received today is a key step forward in the Beyondie Development Joint
Venture with our Chinese partners CMIC and we look forward to continuing
to work with them to develop the Beyondie Project into a world class
magnetite mining operation,” he said.
The companies plan to
commence mining operations with an initial targeted production of 3Mtpa
of magnetite concentrate, plus a share and option placement to CMIC to
raise $5 million.
Under the terms of the Beyondie Development
Joint Venture a company (Beyondie J/V Operations Pty Ltd) has been
incorporated to manage the project.
Beyondie J/V Operation Pty
Ltd will initially be funded with an injection of A$200 million of
equity provided equally by CMIC and EMG.
CMIC under the terms of
the Joint Venture Agreement (JVA) will facilitate a loan of $100 million
to Emergent (at 3% above Reserve Bank of Australia benchmark interest
repayable from earnings with a term of 6 years from drawdown) to enable
the company to subscribe for its equal share of the Joint Venture.
Garry
Hemming, Emergent Resources managing director, said under the terms of
the JVA, EMG will provide the tenements associated with the Beyondie
Iron Ore Project to the Joint Venture.
Emergent Resources shares
rose 8% to 54 cents in trading this morning.
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