30/04/2010 Golden State finalises sale of its interest in Johnson Range
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01059334
30 April 2010
Golden State finalises sale of its interest in Johnson Range Iron Ore Project in WA to Cliffs for A$3M and retaining a 2% sales royalty
KEY POINTS:
• Golden State Resources have executed the formal agreement with Cliffs Natural Resources for the sale of its interests in the Johnson Range Iron Ore Project;
• Cliffs has paid Golden State A$3Million, by way of a non-refundable prepayment on future royalty payments;
• Cliffs will pay Golden State a gross royalty of 2% on the iron ore sales from the tenements as well as a 2% gross royalty on the sale of all other minerals;
• Cliffs Asia-Pacific Iron Ore business unit operates the Koolyanobbing and Cockatoo Island mining operations which sold 8.5 million tons in 2009;
• The Johnson Range tenements adjoin Cliffs existing Yilgarn developments and can be developed to supplement exports via Esperance; and
• The sale will entitle Cliffs, an existing producer in the region, to contribute to the development of the Johnson Range Iron Ore Project and is seen as an ideal way to accelerate the project development.
Golden State Resources Limited (ASX: GDN) (“Golden State” or “the Company”) wishes to advise that it executed the formal agreement with Cliffs Asia Pacific Iron Ore Pty Ltd ("Cliffs") to sell all of its right, title and interest in the Johnson Range Iron Ore Project (“Johnson Range”) in the Yilgarn region of Western Australia.
As partial consideration for the sale, A$3Million has been paid to Golden State in the form of a non-refundable royalty prepayment.
Cliffs will also pay Golden State a 2% gross royalty, based on the average/tonne FOB sales of all iron ore transported from the Johnson Range project area. In addition Golden State will also be entitled to a 2% gross royalty on the sale of all other minerals transported from the project.
“Cliffs are the ideal choice to ensure the timely development of the Johnson Range Iron Ore Project which will see benefits flowing through to our shareholders in the foreseeable future. I would also like to thank the board members, staff and consultants for their efforts in finalising the transaction.” said Golden State Resources Limited Managing Director, Mr Richard Sciano.
The Johnson Range project is located in the Yilgarn region and is near Cliffs Windarling iron ore deposits where mining operations have occurred for a number of years. Iron ore deposits have been located within the project area, with field sampling confirming the presence of high grade ores.
The Yilgarn region of Western Australia is predicted to emerge as the second largest iron ore producing area in Australia, with existing infrastructure and port facilities at Esperance the area is well ahead of other emerging iron ore producing areas.
“We felt that Cliffs’ proven development and mining abilities would ensure the project was developed to the benefit of the Company and its shareholders, and allow the Company to focus its attention on the development of its other assets, in particular its Golden Eagle oil and gas project in the US,” Mr Sciano added.