Padbury Mining attracts Chinese investment in magnetite project
Padbury Mining (ASX: PDY) has signed a breakthrough, non-binding
Memorandum of Understanding (MOU) with a Chinese investor for an
investment of A$5 million in the company and a purchase of ore on the
commencement of production at the Peak Hill magnetite project.
The MOU will form the basis of negotiation for a formalised agreement for "an injection of capital and purchase of ore on commencement of production, to be discussed and executed when the chairman of the investor company visits Perth and Padbury's tenements with a five person delegation next month."
Subject to successful negotiation of a formalised agreement, the investor will be injecting A$5 million into the company by acquiring a placement of approximately 143m shares at Australian 3.5 cents per share (A$0.035) in Padbury.
Gary Stokes, Padbury's managing director, said the development "will provide us with further cash that can be directly invested into the company's forthcoming drilling and testing programs, as well as providing us with the opportunity to discuss further funding requirements up to and including bankable feasibility stage."
Padbury considers this another step forward in its quest to becoming a key magnetite supplier in the MidWest.
This is the first such agreement signed by the company, although it has signed seven other non disclosure agreements with Chinese parties interested in acquiring a stake either in the company directly or in the Peak Hill project itself.
The company said "this confirms Padbury's belief in the Peak Hill magnetite project and demonstrates China's continued interest in Australian resources and in magnetite as a feed for its dynamic steel industry."
Padbury is currently developing its next drilling program in conjunction with CSA Global in a concerted effort to achieve a JORC compliant resource in 2010.
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