Arafura Resources: Ferrowest acquires Yalyirimbi Iron Project
May 16, 2013 (Source: Arafura Resources) —
• Positive due diligence completed
• Ferrowest to proceed with the Sale and Purchase Agreement to acquire 60% of the Yalyirimbi Iron Project
• Strategic acquisition of DSO project with potential for early cash flow
• Key turning point in Ferrowest’s strategy
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Ferrowest Limited (“Ferrowest” or “the Company”) advisesthat following a period of successful due diligence, the Company will now proceed with the completion of the Sale and Purchase Agreement to acquire the rights of Ngalia Resources (‘’Ngalia’’) to the Yalyirimbi Ore Project (“the Project”) in the Northern Territory. As a result the Company will also take up the proposed joint venture with Arafura Resources to develop the Project.
As part of the technical due diligence (announced to the market on 30 April 2013), the geological due diligence site visit to Exploration Licence 24548 confirmed occurrences of high grade Direct Shipping Ore. The samples were taken to the ALS laboratory in Alice Springs which indicated iron values up to 68.71% Fe with negligible silica in five out of the nine samples tested. This confirms the Project has the potential for a relatively quick and low cost start-up operation which will allow the Company to generate a positive short term cash flow while developing the larger Project.
Following completion Ferrowest’s first order of business will be to commence a diamond drilling programme with the aim of upgrading the existing Inferred Resource to an Indicated and Measured status. At the same time, the Company will open negotiations on rail and port options and commence the necessary environmental and native title approvals processes. Sample material from the diamond drilling will also be used to optimise the metallurgical test work and to determine a suitable flow sheet for the ore preparation plant.
Ferrowest will now proceed with the Terms of Acquisition as noted to the market on 25 March 2012, and repeated below.
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