SECURITIES EXCHANGE ANNOUNCEMENT & MEDIA RELEASE
3 November 2008
GINDALBIE RECEIVES ALTERNATIVE FUNDING
PROPOSAL FROM ANSTEEL
ENGINEERING, DESIGN AND DEVELOPMENT WORK TO CONTINUE ON SCHEDULE
Gindalbie Metals Limited (ASX: GBG – “Gindalbie”) advises that it has received an alternative funding proposal in
connection with its final equity contribution to the Karara Iron Ore Project from its joint venture partner, Anshan Iron &
Steel Group Corporation (AnSteel).
Under the previously announced agreed payment schedule for equity payments, Ansteel has made three payments to
date totaling A$228.4 million and Gindalbie has made one payment of A$18.38 million. The final equity payment, of
A$143.68 million each, was due to be made in October.
Gindalbie had previously exercised its right, under the terms of the Karara Joint Venture Development Agreement
(JVDA), to request AnSteel to arrange finance for Gindalbie’s share of the final equity contributions to the Project.
Under the terms of the agreements, AnSteel is required to arrange this finance as debt on acceptable terms.
AnSteel has now proposed an alternative funding arrangement to Gindalbie, which is being considered and assessed
by the Board of Gindalbie. The alternative proposal would involve Gindalbie issuing shares to Ansteel at a substantial
premium to the current share price for a total fund raising of A$162.06 million, which would cover the final equity
contribution plus the earlier contribution already made by Gindalbie out of its existing cash reserves. Any placement
would require the approvals of Gindalbie shareholders, Foreign Investment Review Board,and Chinese regulatory
approvals and would require an independent expert’s report.
In light of these developments the final equity payments by AnSteel and Gindalbie have been deferred until a final
resolution has been reached on the equity funding arrangements. AnSteel has advised Gindalbie that it has the funds
available in Australia to make its final equity payment and has also reaffirmed its full support for the rapid development
of Karara and the continued feasibility of expansion opportunities.
The joint venture company, Karara Mining Limited (KML), currently has almost A$200 million in cash reserves from
earlier equity payments and the decision has no impact on the ongoing engineering, design and development work for
the Project. In addition, discussions are advancing well with China Development Bank to provide project finance to
KML in the order of A$1.4 billion at competitive rates. All other rights and obligations associated with the Joint Venture
Development Agreement are preserved such as Ansteel taking 100% offtake from Karara at benchmark prices and in
particular for concentrate, at benchmark plus a premium.
“These equity funding discussions confirm AnSteel’s commitment to the project and highlight the strength of the long-
term relationship Gindalbie has with its joint venture partner. In the current market this is a very positive alternative as
it would leave Gindalbie itself debt-free,” said Gindalbie’s Chairman, Mr George Jones.
“We expect to conclude a suitable arrangement with Ansteel for Gindalbie’s share of the final equity contribution to
meet the final contribution as soon as reasonably practicable.”
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While the Board of Gindalbie is assessing the proposal it has requested its securities remain subject to a trading halt.
- ENDS -
Released by: On behalf of:
Nicholas Read
Read Corporate Mr Garret Dixon/Mr David Southam/Mr Michael Weir
Managing Director/Chief Financial Officer/Investor
Relations Manager
Telephone: (+61-8) 9388-1474 Telephone: (+61-8) 9480-8700
Mobile: (+61-8) 419 929 046
www.gindalbie.com.au