Australian company Dynasty Metals announced Sunday that it had received an offer from Hebei Xinghua Iron and Steel Co., Ltd. for a 34 percent stake in the company.

The Chinese company will buy 40 million new shares in Dynasty at a price of AUD 0.16 per share. The offer also makes provision for the issue of 20 million options at an exercise price of AUD 0.20 per option with an expiry date of December 31, 2012.

Xinghua was established in 1985 by a group of ex-servicemen led by Chen Maochun, a demobilized army officer. Headquartered in Fuzhou, capital of east China's Fujian Province, its annual demand for iron ore is about 3 million tons, mainly purchased from Australia, India and the Chinese mainland.

Xinghua will be closely involved in the management of Dynasty, especially with exploration and evaluation of new projects. Two Xinghua representatives will be appointed to the Dynasty board.

Xinghua also plans to set up a Dynasty representative office in China.

China's business press carried the story above on Monday. China.org.cn has not checked the stories and does not vouch for their accuracy.