Belmont-based Ferrowest Ltd has finalised the terms with its first cornerstone off-take and investment partners for the Yalgoo iron project.
Belmont-based Ferrowest Ltd has finalised the terms with its first cornerstone off-take and investment partners for the Yalgoo iron project.
The proposed agreement with two foreign companies working together, remains subject to a final legal review of the documentation by all parties and final approval by the respective boards.
The legal reviews are expected to be completed in the next few weeks and the last of the three board meetings to approve the agreements is scheduled for the end of November.
Subject to these board approvals, it is anticipated the agreements will be signed at a ceremony in Perth in early December.
The detail of the agreements will be announced once they are executed.
However the key terms agreed in principle are that the investors will have the right to enter into 50:50 joint venture with Ferrowest for the development and operation of Yalgoo, and will advance $12.5 million to complete the definitive engineering study.
Both the investors are substantial corporations of long standing and Ferrowest believes that being able to close these agreements in the current global financial conditions demonstrates that its business strategy of difference in focusing on merchant pig iron is vindicated.
The other important aspect of these agreements is that Ferrowest will secure the funds needed to continue its activities in developing the Project without having to dilute existing shareholdings through a large equity placement at the current low share price levels.
Discussions are also underway with other potential cornerstone investors interested in marketing Ferrowest's remaining 50% of the project MPI output in exchange for equity investments in the company and other project support initiatives.
Ferrowest expects to start construction in the third quarter of 2010, with commissioning to start in either quarter one or two of 2012.
