Padbury Mining said today it has received a non-binding offer from China's Taifeng Group Co to take a 30 per cent stake in the company and a half share of its Peak Hill iron ore project.
The offer is subject to due diligence, which will start with a six-member delegation visit by Taifeng led by Chairman Song Yuangang, to the company's tenements in May.
Padbury said Taifeng will submit a binding offer within 10 days of the successful completion of these investigations.
If approved by Padbury shareholders, the deal will then require the consent of the Foreign Investment Review Board.
Padbury chairman Dr John Saunders said he was looking forward to meeting Mr Song to discuss the offer further.
"I am pleased to see interest in Padbury growing following the release of our maiden JORC magnetite resource and our haematite exploration target. I expect this to be one of several expressions of interest to come from Asia," he said.
Managing director Gary Stokes said the interest was a vote of confidence in Padbury's iron ore resource at its flagship Peak Hill project in Western Australia's Mid West Region.
Taifeng's complete offer includes:
- A 19.9% placement in Padbury at 3.3 cents per share. This level is to be maintained at a fully diluted level.
- Subject to the agreement of Padbury's shareholders Taifeng is seeking a one year option to increase its shareholding to 30 per cent of the fully diluted share capital with the options exercisable at 5 cents per share.
- Acquisition of 50-60 per cent of the Peak Hill Iron Ore project at an agreed price upon completion of a Bankable Feasibility Study of the project.
- A pre-emptive right to subscribe to Padbury shares from any future equity placements in order to maintain its equity undiluted.
- A seat on Padbury's Board following the acquisition of the initial 19.9 per cent stake being sought.
