Emergent Resources (ASX: EMG) has reported that the Foreign Investment Review Board (FIRB) has confirmed the approval of the company’s A$200 million joint venture with Chinese State Owned Enterprise Beijing China Metallurgical Investment Company Ltd (CMIC) for the development of Emergent’s Beyondie Iron Project in the Mid West region of Western Australia.
In a statement the company said this represents a significant step in the development of the Beyondie Project.
The FIRB approval follows the signing of a Binding Agreement between Emergent and CMIC last October to proceed with the A$200 million 50:50 joint venture to develop the Beyondie Project.
Emergent’s Chairman, George McMaster said that he welcomed the FIRB approval decision by the Commonwealth Government.
“The FIRB approval received today is a key step forward in the Beyondie Development Joint Venture with our Chinese partners CMIC and we look forward to continuing to work with them to develop the Beyondie Project into a world class magnetite mining operation,” he said.
The companies plan to commence mining operations with an initial targeted production of 3Mtpa of magnetite concentrate, plus a share and option placement to CMIC to raise $5 million.
Under the terms of the Beyondie Development Joint Venture a company (Beyondie J/V Operations Pty Ltd) has been incorporated to manage the project.
Beyondie J/V Operation Pty Ltd will initially be funded with an injection of A$200 million of equity provided equally by CMIC and EMG.
CMIC under the terms of the Joint Venture Agreement (JVA) will facilitate a loan of $100 million to Emergent (at 3% above Reserve Bank of Australia benchmark interest repayable from earnings with a term of 6 years from drawdown) to enable the company to subscribe for its equal share of the Joint Venture.
Garry Hemming, Emergent Resources managing director, said under the terms of the JVA, EMG will provide the tenements associated with the Beyondie Iron Ore Project to the Joint Venture.
Emergent Resources shares rose 8% to 54 cents in trading this morning.