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Centrex offered lease for Wilgerup project

News Release

www.ministers.sa.gov.au

Hon Paul Holloway

Minister for Mineral Resources Development
Minister for Urban Development and Planning
Minister for Small Business

Thursday, 14 May 2009

Minister for Mineral Resources Development Paul Holloway today said Centrex Metals has been offered a 10-year mining lease for its Wilgerup iron ore project on South Australia’s Eyre Peninsula.

“This announcement is yet another milestone for South Australia and highlights the continued confidence of this State’s minerals sector despite the global economic recession,” Mr Holloway says.

“The Wilgerup project follows on the success of One Steel’s Project Magnet in the Middleback Ranges and will create both jobs and export income to support the South Australian economy into the next decade and beyond.”

Primary Industries and Resources S.A. offered the mineral lease to Centrex for the Wilgerup project, which is located 20 kilometres south east of Lock in central Eyre Peninsula.

“The Mining Lease offered to Centrex Metals comes with strict environmental conditions and the Company won’t be able to begin mining until a comprehensive Mining and Rehabilitation Program (MARP) is approved by PIRSA,” Mr Holloway says.

Centrex Metals plan to develop a two million tonnes per year hematite mine with an estimated capital expenditure of $50 million.

Mr Holloway says the Wilgerup Mine is expected to directly generate 120 to 150 locally recruited jobs and contracts, with an indirect employment multiplier of about 3 to 1.

Commercial mining at Wilgerup is expected to begin in the coming year, after all statutory approvals are finalised, with the first shipment of iron ore scheduled for May 2010.

This timing is contingent on approval of the company’s Development Application for construction of mineral export facilities at Port Lincoln’s main wharf.

Centrex Metals have submitted a proposal under Section 49 of the Development Act to develop a minerals export facility on the main wharf at Port Lincoln, to enable them to export iron ore mined from Wilgerup to market.

“A decision on that application is still to be determined by the independent Development Assessment Commission,” Mr Holloway says.

“Assessment of the Development Application under the Development Act 1993 will not be influenced by the decision to offer a Mining Lease at this time.”