China Guangshou to acquire C. Sulawesi molybdenum project
Friday, September 3 2010 - 05:16 AM WIB
CGGC is to commit to funding 100% of the exploration, development and exploitation costs required to take the Malala Molybdenum project into production, the company said.
Under the proposed agreement, VWM and the company?s local BUMD (regency owned enterprise) partner are to be ?free carried? to large scale production. As a result, VWM and the BUMD will hold a direct or indirect interest of 27.5% and 5% respectively in the project. A further 2.5% interest will be acquired by local Chinese interests.
VWM and CGGC agree to work together to determine the most efficient structure to hold their respective project interests.
The parties have agreed to a 25 day completion period under the MoU, during which time the parties will finalise legal and tax due diligence and enter into a Memorandum of Agreement (MoA) that will set out the detailed terms of the proposed transaction. Upon execution of the MoA, CGGC is to make a payment of US$500,000, and an additional payment of $500,000 is payable within 70 days from the signing of the initial MoU.
It is expected that an aggressive timetable to production will be undertaken (subject to local regulatory requirements) with an initial focus on identifying, defining and exploiting early production opportunities from high grade mineralization identified through early targeted exploration.
The parties agree that any profits generated from Small Scale Production activities are to be reinvested to develop larger scale production mining projects with a minimum sustainable production target of 5 million tonnes per annum processing.
VWM?s CEO, Robert Hyndes said ?over the last 6 months, we have been in active discussions with potential partners that have the financial strength, mining experience, and international standing to enable VWM to extract full value from the Malala Molybdenum Project. VWM is delighted to have attracted such a strong partner as CGGC who are not only experienced Molybdenum miners but have the global reach and financial capability to exploit the Project to its full potential and develop the resource into a world-class project?.
CGGC is a diversified international industrial group engaged in a broad range of operational and investment activities across industries including mining, engineering, construction and real estate. (kanti)