News

We refer to the Bidders' Statement dated 14 May 2014 (as supplemented by a first supplementary bidders' statement dated 5 June 2014) (Bidders' Statement) in respect of the joint offer (the Offer) by Baosteel Resources Australia Pty Ltd ABN 66 154 815 362 (Baosteel) and Aurizon Operations Limited ABN 47 564 947 264 (Aurizon) (together, the Bidders) to acquire 100% of the ordinary shares in Aquila Resources Limited ACN 092 002 769 (Aquila) that they do not already own for A$3.40 per share (the Offer Price).

The Bidders today announce that they will not increase the Offer Price.

The Bidders also announce that they will not extend the Offer Period[1], which is scheduled to close at 7.00pm (Sydney time) on 11 July 2014, unless all remaining Defeating Conditions of the Offer are fulfilled or waived by them prior to that time.

The Bidders encourage Aquila shareholders to accept the Offer before it is scheduled to close at 7.00pm (Sydney time) on 11 July 2014.

The Offer is the only offer available for all Aquila shares today.

Baosteel Resources International Co. Ltd Chairman Mr Dai Zhihao said: "Over five years Baosteel has tried to support the development of Aquila but believe the company has reached an impasse. Baosteel and Aurizon announced the Offer for Aquila shares with the intention to progress Aquila's stalled development projects. The full cash Offer gives Aquila shareholders an opportunity to realise certainty of value for their investment at a substantial premium to trading prices prior to the announcement of the Offer. This is in stark contrast to remaining a shareholder of Aquila and facing the challenges and uncertainties of volatile commodity markets, risks of financing large capital expenditure, potentially dilutive capital raisings, and the challenge of developing genuinely economically feasible greenfield projects. If the bid is unsuccessful, and based on the current facts known to us at the date of this announcement, Baosteel sees no meaningful prospect for being involved in the development of the WPIOP. In those circumstances Baosteel (and its related entities) would have to carefully consider their ongoing shareholding in Aquila."

Aurizon Holdings Limited CEO and Managing Director, Mr Lance Hockridge said: "Our Offer gives Aquila shareholders the opportunity to avoid the inherent funding and development risks associated with Aquila's greenfield projects. It is an all-cash offer at a significant premium to the Aquila share price prior to the bid, being a 52.7% premium over the 12 month volume weighted average sale price of Aquila shares to the Offer announcement on 5 May. Aquila shareholders should also take into account that iron ore prices have declined by about 15% since the Baosteel and Aurizon Offer was announced.

Baosteel and Aurizon together have the capacity to fund, the resources and the genuine capability to progress Aquila's greenfield projects with the joint venture partners.

In this context, we hope the Aquila Board will consider this compelling and certain all-cash offer in the interest of all shareholders."

[1] Subject to any automatic extension under the Corporations Act

ENDS

For further information regarding the Offer, please contact the Bidder's advisers: