Abacus Completes Asset Purchase Agreement with Teck

Abacus Completes Asset Purchase Agreement with Teck

Abacus Mining & Exploration Corporation is pleased to announce that it has completed the acquisitions contemplated under the Asset Purchase Agreement dated November 25, 2005, as amended with Teck Resources Limited pursuant to which certain assets of Teck’s former Afton mine, and most notably the Iron Mask and Rainbow back-in rights, were acquired.

The APA provided for the sale by Teck to Abacus of the Iron Mask and Rainbow back-in rights that Teck held to certain Afton-Ajax mineral claims, as well as the tailings pond, mill, workshop and office buildings of the former Afton mine and the land upon which such buildings are situated. Such assets were valued at $29,250,000, which was payable by cash payments totaling $10,750,000 (previously paid) and the issuance of 18,500,000 common shares (previously issued). The closing of this transaction provided for the issuance to Teck of an additional 20,751,176 common shares in Abacus to satisfy the last of the share payments owing under the APA.

As a result of this transaction, Teck now owns 39,251,176 shares of the Corporation representing 19.9% of the issued and outstanding shares of Abacus.

Pursuant to the provisions of the previously announced Joint Venture Shareholders’ Agreement dated October 12, 2010, these assets have been transferred to the joint venture company, KGHM Ajax Mining Inc. (“KGHM Ajax”), 49% of which is owned by Abacus and 51% of which is owned by Abacus’ joint venture partner, KGHM Polska Miedz S.A. (“KGHM”). A remaining final cash payment to Teck of $5 million required under the APA is to be made on or before October 8, 2012. The payment will be assumed by KGHM Ajax, provided that KGHM exercises its option to increase its ownership position in KGHM Ajax to 80%, which Abacus expects to occur later this year. KGHM currently owns 15,000,000 shares of Abacus, representing 7.6% of the total shares issued and outstanding.

Jim Excell, President & CEO of Abacus, commented on the transaction, “Concluding the APA with Teck brings to a close a chapter that has long been outstanding. Abacus effectively has two major shareholders and industry leaders in Teck and KGHM, and a clean slate to build significant value and cashflow growth under a world class mining team with the Ajax project as its cornerstone.”

Work continues to progress on the Feasibility Study of the Ajax Mine expected to be finalized in the fall of this year with environmental permitting now underway.

Share this post