Charter Pacific Corporation To Continue Exploration For Iron Ore In Mauritania With Entitlement Issu

Jul. 22, 2013 12:22 AM ET

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Charter Pacific Corporation (ASX:CHF) is looking to an entitlement issue to fund an exploration campaign focusing on a trenching and RC drilling program at Permit 792 in Mauritania.

The renounceable entitlements issue is two (2) fully paid ordinary shares in the capital of the company for every three (3) fully paid ordinary share held by shareholders on 30 July 2013 at an issue price of A$0.04 per new share.

If fully subscribed, the issue will raise approximately A$3,289,472 before costs.

to emulate previous ASX-listed Sphere Minerals in Mauritania, which was acquired by Xstrata in a $514 million takeover offer.

While early days at the Kaoua El Khadra Prospect, there are similarities with Sphere's Lebtheinia iron ore deposit, currently being developed by GlencoreXstrata in Mauritania.

Adding spice, Jindal Steel and Power Limited has acquired an adjacent Permit to Charter Pacific's Kaoua and is conducting its own exploration program.

With an iron ore Exploration Target of 2.6 - 4.4 billion tonnes at Kaoua El Khadra Permit, there is no shortage of iron ore on its tenements.

Early-stage iron ore exploration has revealed high grade results that show potential for a marketable concentrate to be produced at relatively low cost. Therein holds the key to the decision by GlencoreXstrata to develop their Mauritanian iron ore deposits and the allure of Charter Pacific's Kaoua permit.

There are geological similarities between GlencoreXstrata / Sphere's Mauritania Lebtheinia iron ore deposit and Charter Pacific's Kaoua prospect surface expression, in that the project areas are largely flat. This would ease the development of necessary infrastructure.

Research has shown that production costs in Mauritania using a dry sinter process are approximately $32 per tonne (GlencoreXstrata), which are lower operating costs than Pilbara FOB iron ore. The sinter feed route favoured by other iron ore developers in West Africa (dry grinding as compared to wet grinding and pelletisation) has the advantage of lower pre-production capital expenditure.

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