Prosperity International Holdings (H.K.) Limited (HKG:0803) announced Pro-Rise, a direct wholly-owned subsidiary of Prosperity Minerals Holdings Limited (PMHL) (a direct 64.07%-owned subsidiary of Prosperity International), entered into a new loan agreement with United Goalink Limited (UGL), pursuant to which Pro-Rise agreed to provide UGL with the new loan in the sum of US$15 million (HK$117 million).

In addition, the original loans of an aggregate amount of approximately US$22.8 million (HK$177.8 million) which remain outstanding as at yesterday have been novated from Globest Participacoes Ltda (GPL) to UGL. The aggregate loans advanced by Prosperity International to UGL represent a total sum of approximately US$37.8 million (HK$294.8 million).

PMHL holds an effective 35% interest in UGL. Part of the new loan is to be used by UGL to fund further capital expenditure on the iron ore processing plant, an upgrade of current facilities and operating expenses. Once the processing plant is completed, the iron content will be increased to 62% or higher and will command a higher selling price while the increased production will also lower average production costs. The increased production volume and higher quality of the iron ore is expected to bring enhanced profit and cashflow to Prosperity International.

UGL is a joint venture company engaged in the exploration and production of iron ore in Brazil. UGL owns a 99.99% interest in Globest Resources Limited, which in turn owns a 99.99% interest in GPL. GPL is interested in approximately 602.3 km2 of iron ore mining rights in the State of Ceará, Brazil.

Source:chinesestock.org