Australian iron ore miner Dynasty Metals Australia Limited (Dynasty) has announced that it has received a letter of offer from private sector Chinese steelmaker Hebei Xinghua Iron and Steel Co. Ltd (Xinghua) for the acquisition of a 34 percent stake in Dynasty. The Chinese mill will also receive priority in procurement of iron ore supplies from Dynasty.
The offer comprises a placement to Xinghua of 40,000,000 new shares in Dynasty at a price of AU$0.16/share to raise AU$6,400,000. In addition, the offer makes provision for the issue of 20,000,000 options with an exercise price of AU$0.20/option and an expiry date of December 31, 2012.
Xinghua will join the management and drill assessment work of Dynasty. Two members of Xinghua will sit on the board of directors of Dynasty, while Dynasty will establish an office in China.
Dynasty chairman, Ian Levy said, "The letter of offer from a significant Chinese steel producer, Xinghua, is a strong endorsement of Dynasty's investment attractions. This strategic partnership will provide a strong foundation to support the enhancement of project assets and corporate growth."
Xinghua was established in 1985 in Fuzhou city in the southeastern Chinese province of Fujian. The annual iron ore demand of the company is 3 million mt. At present, it purchases iron ore from Australia, India and China.