WPG 0.00% 1.5¢ wpg resources ltd

key financing package secured

  1. 9,286 Posts.
    Western Plains Resources Ltd (ASX: WPG) is pleased to advise that it has executed a binding agreement which provides for an equity injection into the Company on favourable terms, the provision of a debt funding package for development of the Company’s DSO iron ore projects in South Australia subject to the completion of a satisfactory BFS and the grant of a mining lease, and an iron ore offtake contract on a take or pay basis.

    WPG has yesterday executed a binding heads of agreement (HOA) in China with Focus Investment Limited (Focus) and Tangshan Xingye Industry and Trade Group Co., Ltd (Xingye) pursuant to which:

    Focus will subscribe for 5,813,953 ordinary voting shares in WPG for a total subscription amount of $7.5 million at an issue price of $1.29 per share;

    Focus will be solely responsible for procuring project debt funding of not less than $50 million for development of the Company’s direct shipping iron ore (DSO) projects; and

    Focus and/or Xingye will be granted the exclusive right and obligation to purchase not less than 70% of DSO ore produced, on a take or pay basis.

    Bob Duffin, WPG’s Executive Chairman said:
    “The agreement with Focus and Xingye represents a great leap forward towards the development of our iron ore projects. It is a win-win outcome for all parties concerned. Focus is an entrepreneurial trading and investment group that sees the benefits of our projects to its business strategy of increasing its exposure to the iron ore industry. Xingye is an integrated steel business that is on a growth path, driven by the inexorable increase in steel usage intensity in China. Being privately owned, Xingye has been able to act much more quickly than may have been the case for some of the larger State-owned mills. For our part, the introduction of these high quality strategic partners will allow us to move quickly to finalise the BFS and to fast track the Company’s move from explorer to producer.”
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