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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