News Room - Steel Industry

Posted on 24 Nov 2008

IronClad signs deal with Wuhan Steel

IronClad Mining Ltd has signed a memorandum of understanding (MOU) with steel maker Wuhan Iron and Steel Corp of China to jointly fund and develop two iron ore projects in South Australia.

 

Wuhan, China's fifth largest steel maker, will conduct due diligence before entering into a binding agreement and has expressed acquiring a stake in IronClad.

 

The MOU envisages Wuhan fully funding a bankable feasibility study on the Wilcherry Hill and Hercules iron ore projects before entering into a 50:50 joint venture with IronClad to develop the projects.

 

IronClad shares had surged seven cents, or 53.85 per cent, to 20 cents by 1238 AEDT.

 

Wilcherry Hill and the adjacent Hercules iron ore deposits are 110km west of Port Bonython on SA's Eyre Peninsula.

 

IronClad has initiated a pre-feasibility study on the Wilcherry Hill magnetite project, which is expected to produce up to four million tonnes of iron ore per year from 2011.

 

Magnetite is a low-grade form of iron ore that requires intensive processing to produce a saleable product.

 

Chinese steelmakers and trader's have been looking to secure access to the steel making commodity, forming joint ventures or buying into share registers of a number of junior companies.