Pluton Resources Limited (ASX:PLV) Pluton signs term sheet for Cockatoo Island iron ore assets
Melbourne, Sep 2, 2011 AEST (ABN Newswire) - Pluton Resources Limited (
ASX:PLV) ("Pluton") announces that it has signed a legally binding term sheet with Cockatoo Mining, Cliffs Asia Pacific Iron Ore and HWE Cockatoo ("Joint Venturers") in relation to the acquisition of their beneficial interest in mining tenements and certain infrastructure owned by the Joint Venturers on Cockatoo Island located in the Kimberley Iron Ore Hub ("Potential Acquisition").
The Potential Acquisition is subject to completing due diligence by 31st October 2011, completion of definitive agreements between all parties by 31st December 2011, and conditional on regulatory and third party consents. The completion date for the Potential Acquisition will be at the conclusion of stage 3 of mining operations, expected to be completed in late 2012.
In consideration for the Potential Acquisition, Pluton will assume responsibility for the environmental rehabilitation of Cockatoo Island when mining concludes.
The consideration payable for the Potential Acquisition, and the available iron ore tonnage and expected environmental rehabilitation costs, will be calculated and advised after completion of due diligence, which will commence immediately.
Tony Schoer, Managing Director of Pluton, said: "acquiring the Cockatoo Island assets will transform Pluton into an iron ore producer well ahead of the commencement of mining on Irvine Island."
"The acquisition of Cockatoo Island and access to its existing infrastructure will eliminate the need to duplicate infrastructure like housing and the airstrip on Irvine Island. This will also significantly lower Pluton's environmental footprint on Irvine Island."
"The high grade DSO available from stage 4 mining on Cockatoo will provide important cash flow for the company. In addition, Cockatoo contains significant quantities of lower grade ore that may be preconcentrated on Irvine that would unlock significant value and increase the economic mining life of both the Irvine and Cockatoo operations."
Pluton will work closely with the Joint Venturers to ensure the transition from Stage 3 to Stage 4 mining is as seamless as possible. Subject to achieving regulatory approvals, Pluton expects to produce high grade DSO from Stage 4 soon after completion of the transaction. The current mine development approval extends to the completion of Stage 3 only. Further development approvals will be obtained by Pluton.
Mr. Schoer said Pluton was ideally placed to significantly extend the life of the Cockatoo operations.
"Past exploration by the Joint Venturers indicates a significant quantity of low grade ore that is not suitable for sale as a DSO. Providing metallurgical testing confirms its suitability, Pluton intends to use this as additional feedstock for the pre-concentrator on Irvine Island".
"In addition, Pluton will study the potential of mining the high grade ore body further along strike from stage 4" he said.
The Potential Acquisition will be included with Irvine Island in the joint venture structure currently being negotiated with Timeone Holdings Ltd. Under the terms of the agreement Timeone Holdings will assist with the acquisition cost and the capital and financing for the continuation of mining on Cockatoo.
------------------------------------------------------------Activity Expected Date------------------------------------------------------------Exclusivity and completion of due diligence By 31st October, 2011------------------------------------------------------------Conditions precedent By Completion ------------------------------------------------------------Government approvals By Completion ------------------------------------------------------------Completion and transfer of ownership Late 2012------------------------------------------------------------
Timeone Holdings will also enter into an off-take agreement for 100% of the ore mined from Stage 4.
Note:
Due to the number of requests for clarification from shareholders today regarding the compensation payable for the proposed Cockatoo Island transaction, the Company advises that:
In exchange for the mining tenements and certain infrastructure on Cockatoo Island, the Company will be responsible for the full environmental rehabilitation of Cockatoo Island.
The cost of the environmental rehabilitation of Cockatoo will be estimated during the due diligence stage that is expected to be completed by 31st October, 2011 and be advised after that date.
Contact
Tony Schoer
Managing Director
Mob: +61-411-232-711
Mob: +61-411-232-711
Email: tschoer@plutonresources.com
www.plutonresources.com
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