November 22, 2008

POSCO takes 20% of Sandfire

Business Spectator reported that South Korea's POSCO has taken a 19.9% stake in local diversified minerals explorer Sandfire Resources NL.

Sandfire said that it has received USD 7.23 million, before costs of the issue, for the placement of 16.5 million ordinary fully paid shares and 2.5 million ordinary contributing shares. The deal was well received by the market with Sandfire rising as much as 4%, despite the benchmark index falling 2.4%.

Sandfire said that it would use the funds to extend its drilling program at its Doolgunna iron ore project, 140 kilometres north of Meekatharra in Western Australia. It added that the funds would also be used to continue exploration activities at the Groote Eylandt Manganese Mine, located off the coast of the Northern Territory.

Sandfire also said that it would use some of the funds to conduct further exploration at its Borroloola lead zinc project, which is located near the Macarther River base metals project in the Northern Territory.