Southern Cross sells iron ore assets to Radar

Southern Cross Golcrusher stone manufacturer philippinesdfields (SXG) Limited has reached an agreement with Australian Stock Exchange listed Radar Iron Limited to sell its portfolio of iron ore exploration rights at its Johnston Range and Jackson Range Projects in the Central Yilgarn Mineral Province of Western Australia to Radar Iron Limited for a combination of cash and shares.

SXG retains tenement ownership and non iron rights to the tenements on which Radar has acquired iron rights. The agreement also involves the acquisition by SXG of the non-iron ore rights held by Radar surrounding SXG’s highly prospective Copper Bore project. The proposed transaction is consistent with SXG’s focus on the development of its oxide gold assets in the Southern Cross region as part of its recently announced gold production strategy, which is based on the establishment of a 400,000tpa gold processing facility at the Marda Project and initial targeted production of 30,000oz per year over 5 years.

The consideration payable by Radar for the acquisition of the iron ore rights is:$1.5 million in cash; the issue to SXG of 1 million fully-paid Radar shares; andthe transfer of the rights to all other minerals except iron ore on Radar’s tenements surrounding SXG’s Copper Bore exploration prospect, increasing its strategic footprint in this highly prospective area. The sale is subject to tenement due diligence by Radar with completion expected in March 2011.

Radar is focused on building a significant iron ore portfolio in the Central Yilgarn Mineral Province, which is emerging as a region with substantial iron production (Cliffs Asia Pacific Iron Ore Pty Ltd producing at 8.5mtpa and targeting 11mtpa by 2012) and with active exploration by Cliffs Asia Pacific Iron Ore Pty Ltd and Mineral Resources Limited, amongst others.

SXG’s Managing Director, Mr Glenn Jardine, said he was pleased to have reached agreement to divest these non-core iron ore assets to a focused iron ore exploration and development company.
“This transaction enables us to realise an immediate cash return from our iron ore assets which we can apply to the development of our gold assets, as well as securing an investment in the continued growth and development of Radar in this strategic iron ore region”, Mr Jardine said.

“The transaction also includes a significant acquisition of the non-iron rights around our Copper Bore prospect, where we are currently conducting preliminary exploration activities to follow up some very significant historical copper intersections,” he added. “This area could develop as an area of significant interest to SXG and we are very pleased to have increased our tenement holding in the area.”

SXG is pursuing a gold production strategy in the Southern Cross region which is initially based on the establishment of a 400,000tpa gold processing facility at Marda, producing at least 30,000 ounces of gold per year where the Company’s resource base is centred.