MEDIA RELEASE 6 JULY 2007
TERRITORY EXPANDS FRANCES CREEK TENEMENTS
Territory Resources (ASX: TTY) has reached an agreement with Arafura Resources (ASX:ARU) to
acquire 3 of its tenements and mineral rights in the Frances Creek area south of Darwin, where
Territory last month commenced iron ore production.
The tenements being acquired are AN389, EL2270 and EL10137 and will allow Territory to
consolidate contiguous leases in the Frances Creek region and eliminate a future royalty obligation.
Territory Resources has had in place an agreement with Arafura Resources to explore for and mine
iron ore on the Frances Creek tenements, with a royalty payable by Territory on all iron ore extracted
on Arafura’s tenements.
Territory Chairman Michael Kiernan said once finalised, the new agreement would improve long-term
value for shareholders from our Frances Creek project.
“This is a further step forward for Territory and the Frances Creek project, and is a reflection of our
long-term commitment to become a significant supplier of iron ore,” Mr Kiernan said.
“This agreement will eliminate future royalty commitments as we grow and expand the high-grade
Frances creek project, and will allow us to deliver long-term value to our shareholders.”
Territory will assume ownership of the tenements and subsequent Mineral Leases and will own all
mineral rights except gold. Arafura or its nominee will retain gold rights.
Territory will pay a sum of $2,500,000 consideration to Arafura. Payments will be in two tranches:
Tranche 1: $1,250,000 on acceptance of the agreement by both parties
Tranche 2: $1,250,000 by 31 December 2007.
Following commencement of mining last month, Territory is continuing to develop the 100% owned 1.5
mtpa Frances Creek haematite iron ore project. It is located north of the regional town of Pine Creek
on the Stuart Highway, 190 km south of Darwin with the existing Alice Springs to Darwin rail line
running within 15 kms of the project.
Significant exploration will commence shortly with a target to double resources and thereby doubling
production within 2 years
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REALISATION OF IRON ORE ROYALTIES
FRANCES CREEK, NORTHERN TERRITORY
(ARU 100%) 6 JULY, 2007
Arafura is pleased to announce it has reached an agreement for Territory Resources
Limited (ASX: TTY) to acquire some of its none-core tenements and residual royalty
rights in the Frances Creek area south of Darwin.
There was in place an agreement for Territory Resources to explore for and mine iron
ore on the Frances Creek tenements with a royalty payable to Arafura on all iron ore
extracted. The royalty was at a fixed price and was not sensitive to the underlying iron
ore price.
In 2006, Arafura received $750,000 as a prepayment on future royalties from Territory.
In consideration for the sale of all rights except gold, Arafura will receive $2,500,000 in
two tranches:
o $1,250,000 on acceptance of the agreement and
o $1,250,000 by 31st December 2007.
Arafura Managing Director, Alistair Stephens said, “ This agreement realises value and
provides a lump sum of cash to the company which can be utilised more appropriately
with the company’s flagship Nolans Rare Earths project, which is nearing the pilot plant
stage. The auditing and compliance procedures required to monitor the royalty process
will now also be avoided freeing up personnel to concentrate on the scoping studies for
the Nolans Project. Territory will now also be responsible for environmental and
rehabilitation programmes over this area.” |
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