Interesting announcement made by GDN-Golden State Resources...

Interesting announcement made by GDN-Golden State Resources today.

Golden State sells its interest in Johnson Range Iron Ore Project in W.A. to Cliffs for A$3M and retains a 2% gross sales royalty
KEY POINTS:
h Golden State Resources has entered into a letter agreement with a subsidiary of Cliffs Natural Resources for the sale of its interests in the Johnson Range Iron Ore Project;
h Cliffs will pay Golden State $3M, as a non-refundable royalty prepayment;
h Golden State will receive a gross royalty of 2% on iron ore sales from the tenements as well as a 2% gross royalty on the sale of all other minerals;
h Cliffs Asia-Pacific Iron Ore business unit operates the Koolyanobbing and Cockatoo Island mining operations which sold 8.5 million tonnes in 2009;
h The Johnson Range tenements adjoin Cliffs existing Yilgarn developments and can be developed to supplement exports via Esperance; and
h The sale will entitle Cliffs, an existing producer in the region, to contribute to the development of the Johnson Range Iron Ore Project and is seen as an ideal way to accelerate the project development.
Golden State Resources Limited (ASX: GDN) (Golden State or the Company) wishes to advise that it has entered into an agreement with Cliffs Asia Pacific Iron Ore Pty Ltd ("Cliffs") to sell all of its right, title and interest in the Johnson Range Iron Ore Project (Johnson Range) in the Yilgarn region of Western Australia.
As partial consideration for the sale, A$3M will be paid to Golden State in the form of a non-refundable royalty prepayment and is payable on the execution of a formal agreement on or before April 30th2010.
Cliffs will also pay Golden State a 2% gross royalty, based on the average/tonne FOB sales of all iron ore transported from the Johnson Range project area. In addition Golden State will also be entitled to a 2% gross royalty on the sale of all other minerals transported from the project.
After much consideration, and a review of a range of development opportunities, the board felt that Cliffs were a perfect choice to ensure the timely development of the Johnson Range Iron Ore Project, said Golden State Resources Limited Managing Director, Mr Richard Sciano. We felt that Cliffs proven development and mining abilities would ensure the project was developed to the benefit of the Company and its shareholders, and allow the Company to focus its attention on the development of its other assets, in particular its Golden Eagle gas field in the US, Mr Sciano added.

Cheers.