Emergent Resources Limited is pleased to provide a Quarterly Activities Report for the period ended December 31st 2009.
Emergent Resources continued to focus on the exploration and development of its flagship Beyondie Iron Project in Western Australia. During the quarter the Company completed its 3rd Phase exploration drilling program resulting in a major resource upgrade at the Project which was announced in November.
The JORC Inferred Mineral Resource at the project was upgraded to 561 million tonnes grading 27.5% Fe. This represented a four fold increase on the maiden JORC estimate of 127 million tonnes grading 28.15% Fe announced in the previous quarter. The Mineral Resource was calculated from drilling conducted over only a 12 kilometers segment of the drilled out portion of the Project within the total 60 kilometers strike length covered by Emergent tenements.
The new Mineral Resource upgrade was calculated from 94 Reverse Circulation holes for 12,526 metres and 14 diamond cores for 2,689 metres. In addition to the new Mineral Resource statement, the Company's independent geologists also confirmed an Exploration Target of 480 million tonnes to 510 million tonnes grading 27% to 28.5% within E52/1806. The potential quantity and grade of the Exploration Target is conceptual in nature; there has been insufficient exploration to classify this material as a Mineral Resource and at this stage it is uncertain if further exploration will enable the conversion of this volume to a Mineral Resource.
A further Exploration Target was also confirmed outside of tenement E52/1806 of 3.7 billion tonnes to 4.2 billion tonnes. The potential quantity and grade of the Exploration Target is conceptual in nature; there has been insufficient exploration to classify this material as a Mineral Resource and at this stage it is uncertain if further exploration will enable the conversion of this volume to a Mineral Resource. Drilling of this segment is planned for 2010.
In October Emergent announced the acquisition of 100% ownership of the Beyondie Project through the purchase of De Grey Mining Limited 20% free carried interest. Under the terms of the Purchase and Sale Agreement Emergent will acquire De Grey's right to a 20% free carried interest in the Beyondie Iron Project, giving Emergent 100% ownership of the project, for an initial payment to De Grey of AUD 4.5 million plus deferred payments totaling AUD 2.25 million.
The initial AUD 4.5 million payments to De Grey is due within 30 days of Emergent receiving shareholder approval for the issue of Emergent shares and options to China Metallurgical Investment Co Ltd under Emergent's proposed Development Joint Venture with CMIC for the development of the Beyondie Project, and having CMIC's investment approved by the Australian Foreign Investment Review Board.
Emergent Farm in Agreement with De Grey for the Beyondie Iron Project will terminate at completion of the Purchase and Sale Agreement, and it will acquire 100% ownership and title to the Project tenements will pass to Emergent. De Grey will retain the rights to all non-iron ore minerals.
During the quarter the Company also made significant progress on its proposed AUD 200 million Development Joint Venture with Chinese State Owned Enterprise, China Metallurgical Investment Co Ltd for the Beyondie Iron Project. Last quarter Emergent announced a non-binding MOU with CMIC for the development of the Beyondie Project, which included a 50:50 Development JV, AUD 200 million funding for the project and a AUD 5 million placement to CMIC.
CMIC successfully completed its Due Diligence for the Development JV on October 15th 2009 and on October 28th 2009 Emergent announced that both parties had entered into a binding agreement to proceed with the AUD 200 million 50:50 Development Joint Venture and the placement of shares and options to CMIC to raise approximately AUD 5 million and give CMIC an approximate 15% interest in the Company. Documentation is in the process of final review by legal representatives for both joint venture parties, who have indicated completion of executable documentation within the current Quarter.
Shareholder approval has been granted for the Agreement and it is now subject to Foreign Investment Review Board approval and the Peoples Republic of China National Development and Reform Commission approval. CMIC have advised the continuation of the process to obtain NDRC approvals is proceeding satisfactorily.
