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Gindalbie Metals shares on a tear

Gindalbie Metals shares on a tear

Gindalbie Metals' (ASX: GBG) shares are soaring in afternoon trade today with the stock up 30% to $0.15 with over 18 million shares changing hands by 3pm EST Sydney.

Gindalbie announced yesterday before the market open that the company will remain debt-free with more than A$35 million cash following a proposed financial and ownership restructure of Karara Mining Limited.

The news earlier in the week surrounded that Gindalbie had agreed in principle with its joint venture partner Ansteel to a restructure of the Karara Project in Western Australia, in a move which will leave Gindalbie ideally positioned to take advantage of growth opportunities.

Ansteel is China’s second-largest steel maker and biggest iron ore producer.

Subject to final agreements and satisfaction of conditions precedent, the restructure will see Ansteel undertake to provide all required bridging loan finance to KML to fund any cashflow requirements.

In recognition of funding support Ansteel will have the option to increase its stake in KML to a maximum of 52.16% by converting existing loans to equity, and Ansteel will work with Gindalbie and KML to secure a new long-term working capital facility for KML from China Development Bank.

Gindalbie will therefore have the financial and technical capability to progress its wholly-owned projects including development of the Shine DSO hematite deposit in Western Australia’s Mid-West.

The Shine Feasibility Study on the development of the DSO deposit has been largely completed and indicates the project can generate an attractive financial return at current market prices.

 

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Newswire
June 12 2013

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