Minco Gold Acquiring a Producing Gold Mine in Chinaadmin
Minco Gold Corporation is pleased to announce that the Company, through its wholly owned subsidiary, Minco Mining (China) Co., Ltd. (“Minco China”), has entered into a Joint Venture Agreement (the “JV Agreement”) with the 208 Exploration Team (the “208 Team”), a subsidiary of China National Nuclear Corporation (the “CNNC”), to acquire 51% equity interest on the Tugurige Gold Project located in Inner Mongolia, China.
Under the terms of the JV Agreement, the 208 Team will set up a new entity (the “JV Co”) and transfer its 100% interest in the Tugurige Gold Project into the JV Co, Minco China has the right to contribute a total of RMB 250 million (approximately C$37 million) (the “Earn-In Amount”) to earn a 51% equity interest in the JV Co, with RMB 180 million (approximately C$27 million) to be contributed by the end of March of 2011. The Earn-In Amount is subject to an independent evaluation of the value of the Tugurige Project. To secure the project, Minco China has provided RMB 60 million (approximately C$9 million) in the form of a secured short term loan to the Tugurige Gold Mine. The short-term loan is secured by all the assets of the mine, including the mining licenses and exploration permits. Minco China has the right to convert the loan into its contribution to the Earn-In Amount upon appropriate approvals obtained.
The Tugurige Gold Project consists of the Tugurige Gold Mine, which consists of a 2.62 square kilometers area covered by one mining license, and its surrounding areas of 42.34 square kilometers covered by two exploration permits. The Tugurige Gold Mine is a high grade underground mine which has been producing gold since 1996 and currently operating at 600 tonnes per day, including two CIP mills with approximately 85% gold recovery. Gold is hosted within multiple quartz veins throughout the property.
Minco Gold is currently in the process of conducting detailed due diligence on the project and preparing a NI 43-101 compliant resource estimation on the property.
The JV Agreement is subject to the approvals of various Chinese government agencies. The Company will pay a finder’s fee to a non-arm’s length third party upon all approval obtained and successful conclusion of the transaction.