Founders Metals stock surges to new high on Antino drill results
The new results are highlighted by another high-grade interval of 6 metres at 5.31 g/t gold.
Speculation of Fortescue seeking a Chinese partnership have circulated since chairman Andrew “Twiggy” Forrest visited Shanghai and Beijing in March.
Shares in Fortescue Metals (ASX:FMG), Australia’s third biggest iron ore miner, soared Tuesday on the back of growing speculation about Chinese investors interested in buying a stake in the company.
Fortescue’s stock surged over 15% in early trade, closing at A$2.40, or 10.6% up, after Australian Financial Review reported it had held discussions with China’s No.1 conglomerate, CITIC Limited, and the Asian nation’s steel maker Baosteel about a potential capital restructure.
It is not yet known whether these two are among the one or more companies that are Chinese or part-Chinese owned that have applied to the Foreign Investment Review Board for permission to invest in the iron ore producer.
In a statement to the Australian stock exchange, however, the company said it was “not aware” of any parties seeking permission before the FIRB, adding was “in compliance with its continuous disclosure obligations.”
Source: Google Finance.
Anemic iron ore prices have put extreme pressure on Fortescue as its costs of production are higher than Australia’s two biggest miners and its main competitors, Rio Tinto (LON:RIO) and BHP Billiton (ASX:BHP).
Speculation of Fortescue seeking a Chinese partnership have circulated since chairman Andrew “Twiggy” Forrest visited Shanghai and Beijing in March with members of the company board, after the company’s US$2.5 billion bonds were pulled from sale. At the time Fortescue said it was unable to attract investors and disclosed it was exploring other options for refinancing its $9 billion in debt that begins maturing in 2017.
China’s interest in the underdogs of the iron ore market is growing quickly. Only last week it signed a key deal to help bankroll a massive expansion of low cost iron ore being undertaken Vale (NYSE:VALE).
The agreement gave the Brazilian miner access to up to US$4 billion to finance its $16.5 billion mines expansion and could have Vale producing more iron ore than BHP Billiton and Rio Tinto combined by 2018.
Analysts say a potential investment by Baosteel in Fortescue, the world’s No.4 iron ore producer, could help the Chinese steel maker secure strategic supplies of iron ore more cheaply than developing new greenfield iron ore resources in Western Australia.
