Central Iron Ore Limited: AUD$15 Million Perinvale North Iron Ore Hub Farm in and Joint Venture

Marketwire | June 22, 2011 | 10:34 pm Australia Iron Ore 

Central Iron Ore Ltd. (the “Company” or “CIO”) is pleased to announce that it has, through its subsidiary Central West Resources Pty Ltd, entered into a farm in and joint venture agreement with the Australian Stock Exchange listed Pacific Ore Limited (ASX:PSF) (“Pacific”) in respect of CIO’s Perinvale North Iron Ore Hub (“Perinvale North Hub”) for AUD$15 million (“Joint Venture”). The Perinvale North Hub consists of Exploration Licence 57/818 covering an area of 120km² and is located approximately 550km North East of Perth, Western Australia in the Yilgarn Iron Ore Province (“YIOP”).

Commercial terms

The farm in and joint venture agreement entitles Pacific to earn up to a 90% interest in the Joint Venture by funding expenditure on the Perinvale North Hub in the following manner:

  • Earn 51% by spending AUD$1.5 million within 2 years.
  • Earn an additional 19% by spending a further AUD$3.5 million within 3.5 years.
  • Earn an additional 20% by spending a further AUD$10 million within 5 years.
  • CIO may elect to maintain its interest in the Joint Venture at each stage of the farm in once Pacific has earned a 51% interest.

Yilgarn Iron Ore Project Area

The Company now has a total of 10 tenements covering 652km2 (refer table below) that are located within the YIOP. The YIOP is considered highly prospective, given its history of large-scale iron ore production, with the Cliffs Natural Resources-owned Koolyanobbing operation (also formerly operated by Portman Limited) currently producing at a rate of about 8Mtpa of Direct Shipping Ore (“DSO”). The YIOP is increasingly being recognised as an attractive location for the development of iron ore, given its proximity to rail and access to ports.

Read the full news release here.

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