Sunday, 24 July 2011

Shree Minerals' Tasmanian iron ore project gains major boost with pivotal agreement with Grange Resources

Emerging iron ore producer Shree Minerals (ASX: SHH) has signed a transformational agreement with Grange Resources (ASX: GRR) to form a strategic alliance that is likely to provide significant benefits for the development of Shree's Nelson Bay River Iron Project.

Under the MOU, Shree would gain access to port and ship loading facilities at Port Latta for up to 400,000 tonnes of hematite per annum which is due to commence production in 2012.

In addition, Grange would provide a marketing and sales service for the hematite.

Shree's second stage magnetite project would see Grange process magnetite from Nelson Bay for pelletising at Port Latta.

Shree has an opportunity to develop its Nelson Bay River Iron Project in North West Tasmania by utilising Grange's existing infrastructure. The potential benefits to the local economy are also significant, with positive implications for both employment and the local economy.

Shree has iron ore resources at its Nelson Bay River Iron Project, north of Grange’s Savage River operations, with Indicated and Inferred Resources of 7.8 million tonnes (Mt) magnetite and 1.2Mt goethite hematite. 

Sanjay Loyalka, Shree Chairman, said “this MOU facilitates an opportunity to realise synergistic outcomes from the Nelson Bay Iron River Project and Grange’s Tasmanian Operations to the mutual benefit of both companies, as well as providing enhanced economic benefits in North West Tasmania.”

Earlier this month Shree's in fill resource delineation drilling extended the presence of goethitic-hematite mineralisation at its Nelson Bay River Project, providing impetus to earn early cash flows from Direct Shipping Ore in 2011/12.

Worth over $200 million at current market rates for iron ore, mining of DSO material by Shree Minerals will generate strong near term cash flows and transform the company from explorer to profitable producer.

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