Gindalbie Metals Limited (GBG) is pleased to advise that the Chinese Government has given its formal approval for itd previously announced $162.06 million share placement to its joint venture partner, the leading Chinese steel and iron ore company Ansteel. Following receipt of Foreign Investment Review Board (FIRB) approval in May, the Chinese Government approval is the final remaining condition required for Gindalbie to complete the allotment of 190,658,824 shares to Angang Group Hong Kong (Holdings) Limited or its nominee at a price of $0.85 per share. Once the share placement is completed, AnSteel and Gindalbie will be able to make the final equity contributions, of $143.68 million each, to complete the entire $534 million equity component of the funding package for the Karara Iron Ore Project. Gindalbie and AnSteel will be working to complete the placement procedures within the next 7 days.
Following completion of the share placement, Gindalbie will have approximately 704.6 million shares on issue, with Ansteel holding a 36% stake. After payment of its final equity contribution, Gindalbie will have uncommitted cash reserves of approximately $42 million, no debt and minimal cash burn. For its part, the joint venture company, Karara Mining Limited, will have approximately $350 million in cash reserves, having already spent almost $200 million on long-lead items, pre-development activities and other items required for project development.
“The achievement of Chinese Government approvals represents another very important milestone for the Project following the positive EPA recommendation and FIRB approval received over the past two months,” Gindalbie’s Managing Director, Mr Garret Dixon added. “Ansteel remains fully committed to the development and future growth of Karara, having now invested some $573 million into Gindalbie and directly into the project. We are looking forward to continuing to work closely with Ansteel as we move into the implementation phase of the Project,” he added.
