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Giralia sells off final Red Hill tranche

Kate Haycock
Thursday, 3 July 2008

IRON ore hopeful Giralia has sold off its final parcel of shares in Red Hill Iron to American commodities house AMCI, netting around $A18.5 million from the sale.

The purchase brings AMCI’s total shareholding in Red Hill Iron to around 10 million shares, giving the company – already Red Hill’s major shareholder – just less than 20% ownership in the company and the automatic takeover level.

AMCI is a joint venture partner with Red Hill’s other major shareholder, Aquila Resources, over the Australian Premium Iron project in the Pilbara.

API has a 60:40 JV with Red Hill over the company’s Pilbara tenements, and can earn up to an 80% stake in Red Hill’s holdings.

Meanwhile, in a letter to shareholders yesterday Red Hill said it had $8 million cash on hand and will continue “modest” exploration for base metals and gold in the region.

Red Hill Iron was originally formed through the amalgamation of Giralia Resources’ west Pilbara iron ore assets with those of undisclosed private interests.

API earned its 60% stake in Red Hill’s project by spending $4 million in exploration at the project, and can elect to earn the further 20% stake by providing Red Hill Iron's entire share of project expenditure to the start of production.

Shares in Red Hill were last trading at $6.50, down 15c.

Giralia’s main projects include the Beebyn-Weld Range project in Western Australia’s Mid West and Western Creek in the Pilbara. The company’s shares were last trading at $1.99, down 11c.