Gunson Resources has delivered on its promise to bring major Korean steel producer POSCO on board as a joint venture partner in the development of its Coburn Zircon Project.

Mr David Harley MD of Gunson, told Proactive Investors this is the first step in financing project development. Gunson Resources has delivered on its promise to bring major Korean steel producer POSCO on board as a joint venture partner in the development of its Coburn Zircon Project.

POSCO, which boasts a USD 26 billion market cap., will earn a 40% interest in Coburn with an initial AUD 7 million payment and then contributing the first USD 21 million of Gunson’s share of mine development expenditure.

POSCO’s investment in the project will be within an unincorporated joint venture structure, through a special purpose investment vehicle majority owned by POSCO, with a minority interest held by a Korean based resource investment fund.

The POSCO SPV’s investment in Coburn is contingent upon Gunson raising its 60% equity share of the mine development costs, less the USD 28 million earn-in expenditure by the POSCO SPV, by the end of 2012.

The most recent estimate of capital costs for the development of Coburn is USD 180 million.

Gunson is looking to raise its share of mine development costs through a combination of debt and equity.

Importantly, discussions with a number of banks are well advanced towards securing the debt component of the project financing.

Source - Proactive Investors

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