Western Mining makes first purchase in Australia

One of China’s largest base metals group, the A$9 billion Western Mining Co (WMC) has made its first foray into Australia’s ferrous resources sector – snapping up a key stake in Pilbara iron ore developer, FerrAus. Xining-based WMC will take a direct 10% stake in Adelaide-based FerrAus through a A$1.15 per share placement, under a Share Subscription Agreement executed over the weekend between the two companies. This is expected to inject a minimum A$15.5 million into the explorer, subject to the total expanded number of shares on issue at the time, as the agreement remains subject to Australian and Chinese regulatory, and FerrAus shareholder approvals.

.The investment will immediately rank WMC as among FerrAus’ largest shareholders. FerrAus’ flagship projects include the advanced and highly promising Robertson Range and Davidson Creek iron ore projects in the East Pilbara region of Western Australia.

“FerrAus represents a great opportunity for WMC as I am comfortable about FerrAus’ management team and excited about the exploration and development potential of its iron, manganese and nickel projects,” WMC Chairman, Mao Xiaobing, said. FerrAus Chairman, John Nyvlt, welcomed WMC’s first investment in ferrous raw materials resource projects in Australia. “Members of FerrAus and WMC management teams, as well as a key shareholder in FerrAus, Penfold, have known each other for a long time and share common visions on business development. The support of a major mining house is a big plus to FerrAus’ project development plans,” Nyvlt said. “It means we have support from a key investor in the form of a large, profitable public mining company and it provides a level of independence from steel industry customers and related trading companies.”

Under the Subscription Agreement, the number of shares to be issued to WMC will range Nyvlt said, between 13.53 million and 15.86 million. “The placement will be at A$1.15 per ordinary share and we will forward a Notice of Meeting to our shareholders seeking their approval for the proposed placement to WMC.”

FerrAus Ltd is an explorer and emerging developer of non ferrous raw materials resources focused on iron ore, manganese and nickel and is based in Adelaide South Australia. FerrAus’ English language website is located at http://www.ferraus.com/ FerrAus is listed on the ASX with a fully diluted market capitalisation of approximately A$140 million. It has 100%-owned exploration licences covering over 560km2 in the under explored, highly prospective newly discovered iron ore sub-province in the East Pilbara region, Western Australia. The current resources of direct shipping iron ore are 43 Mt, being classified in accordance to the JORC Code as 23.3 Mt Indicated and 19.7Mt Inferred resources. FerrAus seeks to fast-track development of its current resource to produce low-cost, direct-shipping hematite ore. FerrAus has a successful exploration record and is targeting to ultimately increase the iron ore resources and iron mineralisation at its East Pilbara projects to 250 Mt. FerrAus will pursue exploration activities at its wholly owned Enachedong manganese project located in the East Pilbara and at its nickel/gold Silver Swan North project near Kalgoorlie in joint-venture with the Mithril Resources-BHP Billiton Alliance.

WMC is a top tier Chinese integrated base metals mining and smelting company based in Xining, Qinghai Province. WMC’s Chinese language website is located at http://www.westmining.com/. WMC is listed on the Shanghai Stock Exchange with a market capitalisation of approximately A$9 billion.

WMC has five major base metals mining operations including its flagship wholly-owned Xitieshan zinc-lead-silver mine; and the Huogeqi copper mine, and controlling interests in the Saishitang copper mine, the Gacun polymetallic mine and the Yulong copper development project that contains China’s largest undeveloped copper resource. WMC has controlling interests in the Baihe aluminum smelter and several other lead and zinc smelters and refineries and a copper refinery.