Vancouver, British Columbia-based Salmon River Resources announced Friday that it has signed a non-binding Memorandum of Understanding (MOU) with Beijing, China-based General Steel Holdings Inc. regarding rights to purchase part of any future iron ore production from properties currently under option to and/or to be acquired by Salmon River, and to provide assistance to Salmon River in raising up to C$110 million (US$108 million) in private placement financings as well as committing to fund future capital expenditures and other development costs.
The MOU is intended to lay the groundwork for Salmon River to fund the exercise of its exclusive option to acquire 100 percent of Treppo Grande Iron Pty Ltd. and to fund future development costs of the Treppo Grande iron ore project. Under the MOU terms, the GS Group has also committed to fund future capital requirements as well as provide project management and coordination services to the Company in return for compensation equal to up to a 51 percent profit interest in the Treppo Grande project, on terms to be mutually agreed in the final definitive agreements.
In return for providing financing and management assistance, the GS Group will be granted a right to acquire up to 2 million metric tons per annum of hematite ore production from the properties acquired by Salmon River under the Treppo Grande Option or other properties acquired by Salmon River in the future, at 95 percent of prevailing market prices once production has commenced.