Sydney, Oct 4, 2007 AEST (ABN Newswire) - Aurox Resources Limited (ASX: AXO) announces the signing of a revised long term Sales Agreement with RockCheck Steel Group Co. Ltd ("RockCheck Steel").
The enhanced agreement calls for increased iron ore deliveries to RockCheck Steel rising from 3 to 7 million tonnes per annum within 5 years of commissioning the Balla Balla operation.
The new RockCheck contract complements the current 3 million tonne per annum sales agreement with Chengde Iron & Steel Group which will uplift total annual production and sales of Balla Balla iron concentrate to 10 million tonnes by 2014.
Aurox will immediately commence 'ramp up scheduling' of its 100% owned West Pilbara Balla Balla iron ore project.
Commenting, the Managing Director of Aurox Resources, Mr Charles Schaus, said: "The fact that Aurox will supply the feed that underpins growth and longevity at RockCheck's Tianjin based steel operations, is undeniable evidence of the developing cooperation and synergies between our two companies"
"The phenomenal success of our marketing efforts demonstrates the confidence our customers have in the Company's ability to independently develop the low cost Balla Balla project into one of the regions most profitable and sustainable operations." Based on the 2007 Hamersley fines benchmark price of US80.42 cents per dry metric tonne unit, revenue from sales of Balla Balla concentrate are expected to exceed AUD7.0 billion over the life of the two contracts. However with iron ore prices expected to increase by 20 to 30 percent next year, the value of the sales contracts could be as high as AUD9.0 billion.
About RockCheck Steel Group
RockCheck Steel is a major Chinese high quality flat steel producer located near the port city of Tianjin, close to Beijing. RockCheck's strategic position near the coast provides the company with a favourable logistics advantage compared to other steel makers located further inland and puts RockCheck in a good position to expand further. With a pig iron production capacity of 4 million tonnes per annum, and 2006 actual steel production of 3 million tonnes, the company ranks in the top 100 global steel producers. According to Metal Bulletin, RockCheck is one of China's top 10 privately owned steel mills.
About Balla Balla
The 100% owned Balla Balla iron ore project boasts a JORC compliant reserve of over 100 million tonnes and a 300 million tonne mineral resource. The project is located in the West Pilbara mineral field adjacent to key infrastructure, including gas and grid power, and is within 100kms of Australia's largest iron ore shipping facilities at Port Hedland and Karratha.
The Company has signed two 15 year agreements to sell Balla Balla iron ore concentrate to Chengde Iron & Steel Group Company and RockCheck Steel Group at a sales price equal to the Hamersley Premium Iron Ore Fines price. Aurox will commence shipping 6 million tonnes per annum ("tpa") concentrate to its customers near the end of 2009 and increase to 10 million tpa within 5 years of project commissioning.
Together with Perth based Lycopodium Engineering, Aurox is finalising a bankable feasibility study ("BFS") for the development of a 6 million tonne per annum ("tpa") Balla Balla iron ore concentrate project.
All Balla Balla tenements are granted and the environmental permitting and project licensing are well advanced and scheduled for completion near the end of 2007.
Construction of the concentrate plant and infrastructure is expected to commence shortly thereafter
Contact
Aurox Resources Limited
Telephone 08 9382 4477
Fax 08 9382 2012
email contact: charles.schaus@aurox.com.au
website: www.aurox.com.au
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