RED HILL IRON LIMITED - ASX: RHI

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Description

Red Hill Iron Limited (RHI) was formed in 2005 with the purpose of acquiring and evaluating its extensive tenement holdings that cover much of the western margin of the Hamersley Province of the West Pilbara. It raised $4 million on public listing in February 2007.

The issued capital of RHI is now 43,915,686 fully paid shares with no options or partly paid shares.

RHI has made substantial progress with its plans to become a diversified producer from channel iron deposits located in the Robe River region of the West Pilbara. This region has an expanding infrastructure and is highly prospective for large tonnage, low stripping ratio CID resources. The region is relatively well located in relation to potential port facilities and could be serviced by either of two rail systems in the event that the railway for the Red Hill Iron Ore Joint Venture (RHIOJV) is constructed.

The Company's primary asset is a 40% interest in the RHIOJV. API Management Pty Ltd (API) holds a 60% interest and acts as manager. API is equally owned by subsidiaries of Aquila Resources Ltd and AMCI Inc. Under the joint venture arrangements, API is responsible for all Project funding until the first delivery of product to customers. At that stage it will have earned an additional 20% interest. RHI will then hold a 20% interest and will be required to repay 20% of costs incurred by API in earning its additional 20% interest together with interest accrued at Libor plus 2.5% out of 80% of its share of any future Project net cash flow. Up to the point of first product delivery RHI has the right to elect to exchange its Project interest for a 2% FOB royalty over total Project production which would cancel the requirement to repay debt.

In January 2010, RHI completed the purchase of the Pannawonica CID Project. The 150 square kilometre project area secures two CID mesa systems with a combined strike length of over 14 kilometres. This project has the potential to provide RHI with significant wholly owned CID resources and the Company will carry out substantial exploration during 2010 to advance the project as quickly as practicable.

Mine For

iron ore, gold, manganese

Location of operation(s)

Western Australia

Address

Level 2, 9 Havelock St
WEST PERTH, WA, AUSTRALIA

Phone

(61 8) 9481 8628

Email

Website

http://www.redhilliron.com.au/

Last Updated

02/03/2010