giralia amci 70 million dollar transactions nc, page-11

Mmm - great close. Working its way back to its 12m high ? Someone seems to have liked Tim Boreham "speculative buy" in The Australian yesterday. Joyce should be a bit less underwhelmed tonight:

"""Giralia Resources (GIR) $1.10

BHP and Rio shares may have come off the boil, but Giralia's $70 million jackpot shows that enthusiasm continues unbated in the junior iron ore sector.

A few weeks ago, the WA mid-west hopeful got a knock on the door from the private-equity venture AMCI, co-founded by ex-BHP heavy Mike Salamon.

The AMCI bods offered to take Giralia's 16.8 per cent stake in Red Hill Iron off its hands for $7 apiece, a whopping 35 per cent premium to the prevailing price.

In the process, AMCI was also sold on Giralia's own prospects, which include its stranded Earaheedy dirt near Newman, a potential 1 billion tonne deposit.

The upshot is that AMCI agreed to take a 9.9 per cent, $22million Giralia placement at $1.30 a share, also a 35 per cent premium.

Criterion understands the approach wasn't the first, with Giralia turning away a string of buyers in the past. In the current climate, though, one does not spurn a stranger with a fistful of cash. "We didn't intend to do a capital raising but this was an offer too good to refuse," Giralia chief Mike Joyce says.

The two deals leave Giralia with cash of $77 million, which will be used to expedite drilling and prove up reserves across its five fully owned projects.

The most advanced - the Beebyn project in the mid-west - adjoins the Weld Range deposits held by the warring Midwest and Sinosteel.

An oddity of Giralia is that it holds stakes in seven other spin-off resource plays - six after the Red Hill sale - worth about $20million. It also holds useful uranium ground in yellowcake-friendly SA.

Joyce was "underwhelmed" by yesterday's market reaction, despite Giralia's share price spiking 14c, or 14.5 per cent.

We're sure investors eventually will appreciate the virtues of the deal and ascribe a speculative buy."""