Some real information 21 August 2012
Prosperity Minerals Holdings Limited
('Prosperity' or 'the Company')
Trading Update
Blackrock Metals Inc. Off-take Agreement
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The Company and Blackrock Metals Inc (‘Blackrock’) entered into an offtake
agreement on 28 January 2011, in which Blackrock agreed to
provide Prosperity with 4 million tonnes of iron ore over a four year period
at 90% of the prevailing FOB price in Canada. As part of this agreement,
Prosperity provided, in two tranches, a deposit of US$ 40 million, which
was funded by the Industrial and Commercial Bank of China (Asia)
Limited
(‘ICBC’)
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Production was expected to commence at Blackrock in October this year
with the first shipment to Prosperity to follow later in fiscal 2012-13
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Since the original Blackrock Off-take Agreement was made, the scale of
Blackrock’s project at Chibougamau
in Quebec in eastern Canada has
been extended and plans formulated to enhance the quality of its iron ore.
The Environmental Impact Study ('EIS') was filed with the relevant
governmental authorities some time ago. However,
given the project’s
extension, it has taken longer than previously anticipated to receive
official clearance and this is now expected by the end of this year. Once
official clearance is received, Blackrock will be able to apply for the
required mine construction permits which will allow building to commence.
This means that the first scheduled production of iron ore and subsequent
shipping dates have moved. The latter is now expected no later than 30
June 2015 and, in compensation for the loss of expected economic
benefits, Prosperity has been awarded an additional 800,000 tonnes of
iron ore to be added, on the same basis, to the 4 million tonnes in the
original Blackrock Off-take Agreement at no extra cost
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In turn, the Company has asked ICBC to extend the deposit loan, on the
same basis, and a further update will be provided when this has been
resolved
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The Directors remain positive about the Blackrock project