Russian steel maker Mealloinvest has demonstated its confidence...

Russian steel maker Mealloinvest has demonstated its confidence in iron ore prices by invessting $103 mill in junor miner Strike Resources.
Metalloinvests Cypriot subsidiary Gallagher Holdings, will own about one quarter of Strike and have a seat on the board after yesterday agreeing to buy shares at a 39 per cent premium to the market price
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Strike will use the funds to develop the 2 million tonne a year first stage iron-ore output at its Cuzco project in Peru and complete a bankable feasibility study into the 20 million tonne a year second stage
This Peruvian asset hs the potential to see a rerating of Strike similar to that we have seen with Fortescue Mebals BBY analyst said.
It is a $2 billion-plus project for stage two and ultimately Strike will need strong friends to get the money for that.
Strike raised $34 million on market in May to excercise options to give it up to 68.18 per cent of the Peruvian project.
Peru was recently increased to an investment grade country by Standard andPoor's.
Strike plans to put new people in place to manage its irone ore and coal projects in Australia and Indonesia and might spin these assets out at a later date.
Metalloinvest has signalled its wish to expand into mining globally and sold of of australian iron ore miner Mt Gibson in April for $415.5 million after Mount Gibsons share price had almost tripled in a year.
the Russian steel maker's high profile in Perth in recent years made it an obvious choice of investor, according to Mr Madan.
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from the AFR