WPG Resources sold its iron ore assets to OneSteel for approximately $346 million, equivalent to $1.40 pre-tax per WPG share.
The $346 million includes an estimate for WPG’s expenditure in the period from 1 July 2011 to the date of completion of the sale, which is expected to occur on or about 6 October 2011.
OneSteel will reportedly provide a bridging finance facility of up to $140 million to enable project development to continue at its current pace.
OneSteel will use Whyalla, not Port Pirie, for exporting iron ore from Peculiar Knob and other iron ore deposits developed on the tenements acquired if the transaction proceeds to completion, according to WPG.
WPG will reportedly assist OneSteel to negotiate with all of the construction and service provider contractors engaged by WPG, to develop and operate the Peculiar Knob project in a seamless way under OneSteel’s ownership.
OneSteel will offer employment to all of WPG’s South Australian employees, and some of WPG’s employees in its Sydney office, according to WPG.