Chinese steel producer Ansteel will acquire Gindalbie Metals for $25 million. Previously, Gindalbie will split its subsidiary Coda Mineral and divest it to its shareholders. Gindalbie metal said that the Coda subsidiary was divested to benefit from the exploration of its South Australia Mt Gunson copper and cobalt mine projects, without being affected by the parent company's liabilities. After the divestiture of assets, the Coda subsidiary is expected to receive $10.64 million in cash flow.

If the acquisition and split proposal goes smoothly, the Gindalbie shareholders will receive $0.026 in cash per share, reaching a new high of nearly one year.

In recent years, the company's Karara magnetite iron project in Western Australia has been difficult to achieve profitability. By the end of 2018, the company's outstanding debt reached $231 million.

The Karara Iron Ore Project, managed by Karara Mining Limited (KML), is a joint venture between Ansteel (52%) and Gindalbie Metals (48%). The project is a large-scale integrated mining and infrastructure project. The products are mainly magnetic concentrates. The reserves of iron ore are 2 billion tons, and the annual output of fine powder is stable at 8 million tons.

As a major shareholder, Ansteel will acquire the remaining 64.11% of the company's shares at a price of 2.6 cents per share.

Keith Jones, non-executive chairman of Gindalbie, said: “Gindalbie has played a very important role in the development of the Karara project and has created a lot of employment opportunities for the Western Australia region. We are very proud of this. The Karara project has entered a new era. In today's weak iron ore price environment, small companies like Gindalbie are not suitable for capital-intensive projects like Karara."