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Red Hill Iron
Limited (RHI) was formed in 2005 with the purpose of
acquiring and evaluating its extensive tenement holdings
that cover much of the western margin of the Hamersley
Province of the West Pilbara. It raised $4 million on
public listing in February 2007.
The issued
capital of RHI is now 43,915,686 fully paid shares with
no options or partly paid shares.
RHI has made
substantial progress with its plans to become a
diversified producer from channel iron deposits located
in the Robe River region of the West Pilbara. This
region has an expanding infrastructure and is highly
prospective for large tonnage, low stripping ratio CID
resources. The region is relatively well located in
relation to potential port facilities and could be
serviced by either of two rail systems in the event that
the railway for the Red Hill Iron Ore Joint Venture
(RHIOJV) is constructed.
The Company's
primary asset is a 40% interest in the RHIOJV. API
Management Pty Ltd (API) holds a 60% interest and acts
as manager. API is equally owned by subsidiaries of
Aquila Resources Ltd and AMCI Inc. Under the joint
venture arrangements, API is responsible for all Project
funding until the first delivery of product to
customers. At that stage it will have earned an
additional 20% interest. RHI will then hold a 20%
interest and will be required to repay 20% of costs
incurred by API in earning its additional 20% interest
together with interest accrued at Libor plus 2.5% out of
80% of its share of any future Project net cash flow. Up
to the point of first product delivery RHI has the right
to elect to exchange its Project interest for a 2% FOB
royalty over total Project production which would cancel
the requirement to repay debt.
In January 2010,
RHI completed the purchase of the Pannawonica CID
Project. The 150 square kilometre project area secures
two CID mesa systems with a combined strike length of
over 14 kilometres. This project has the potential to
provide RHI with significant wholly owned CID resources
and the Company will carry out substantial exploration
during 2010 to advance the project as quickly as
practicable. :
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