NICOSIA, Cyprus, July 9, 2012 /CNW Telbec/ - EMED Mining Public Limited
("EMED Mining" or "the Company") (AIM: EMED) (TSX: EMD) - EMED Mining,
the Europe-based minerals development and exploration company, is
pleased to announce that it has entered into a Sale and Purchase
Agreement ("SPA") with Rumbo 5-Cero, S.L. ("Rumbo"), part of an
established diversified Andalucían investment group, in relation to the
€10 million purchase of certain land plots (covering part of the
tailings dams) (the "Land") owned by Rumbo adjoining the Rio Tinto
Copper Mine (the "Mine"). The acquisition of the Land is required in
order to restart production at the Mine and satisfies almost all of the
project's needs for tailings deposition from proposed operations.
In addition, the parties intend to enter into a 50/50 joint venture (the
"Joint Venture") - of which EMED Mining will be the operator - to test
and potentially exploit some tailings and waste dumps.
These arrangements with Rumbo are a significant step forward in the
proposed development of the Mine.
The Company is also pleased to announce that major shareholder and
cornerstone customer Yanggu Xiangguang Copper Co. Ltd ("XGC") has
conditionally agreed to subscribe for 32,247,662 new ordinary shares of
0.25 pence each on the Company (the "Subscription Shares") at a price
of 10 pence per share for aggregate proceeds of US$5 million (the
"Subscription"). These funds will be partly applied in funding the
cash consideration for the acquisition of the Land.
Harry Anagnostaras-Adams, Managing Director, said: "The agreement with Rumbo is a major step forward for the planned
restart of the Mine. It not only facilitates ownership of over 95% of
the project lands, but also establishes a long term commercial alliance
with an important Andalucían business group."
"The concurrent support from our shareholders is greatly appreciated and
we are pleased to welcome an even closer relationship with major
Chinese copper smelter group XGC who now also intends to appoint a
representative to our Board of Directors."
"We are delighted with the continued progress on all fronts. We have
been working hard with all parties to trigger the Rio Tinto Copper Mine
restart by the end of 2012 - with the infrastructure in place, a proven
resource to mine and financing arrangements conditionally agreed, we
are well positioned to recommence mining operations as early as
possible once regulatory approvals permit."
EMED Mining will acquire the Land for a total consideration of €10
million (plus applicable taxes), to be satisfied as follows:
€1 million which was paid in cash on execution of the SPA;
€3.5 million payable in cash on closing of the Land acquisition
("Closing") being not later than 28 September 2012; and
€5.5 million to be satisfied by the allotment of 48,549,234 new ordinary
shares of 0.25p each in EMED Mining (the "Consideration Shares") at
9.14 pence per share on Closing. Rumbo has undertaken not to dispose of
the Consideration Shares until the earlier of: (i) receipt by EMED
Mining of all permits; (ii) 2 years after the date of Closing; or (iii)
the date on which EMED Mining disposes of the Land or its interest in
EMED Tartessus, EMED´s wholly owned subsidiary and owner of the Mine.
EMED Mining has also granted Rumbo a royalty for a period of 10 years of
up to US$250,000 per quarter where, for the relevant quarter, the
average of the LME copper price or the sale price achieved by EMED
mining is US$2.60/lb or more. Under certain circumstances EMED Mining
can defer a particular quarter's royalty payment.
The royalty starts on the earlier of 18 months after the first sale of
copper from the Mine or 6 months after a continuous rate of production
of 9Mtpa has been achieved.
EMED Mining and Rumbo have also agreed to establish a 50/50 joint
venture to test and potentially exploit the tailings and waste
dumps. The Joint Venture will conduct a study to investigate the
economic feasibility of processing the tailings and waste material.
EMED Mining, as operator of the Joint Venture, will endeavour to ensure
that any future processing of the tailings and waste and the operation
of the Mine can be carried out in parallel. However, to the extent that
the two operations are not compatible, the Mine will take precedence.
EMED Mining will be responsible for the initial costs of the Joint
Venture up until the completion of the feasibility study, such costs to
be capped at a total of €2 million. Rumbo's 50% share of these costs
will be deducted from its royalty entitlement. After this, each party
will fund its pro-rata share of the costs of the Joint Venture.
Please click link below to view the map delineating the land owned by EMED Mining and the
land required for restart of the Mine.
Subscription Agreement with XGC
The Company and XGC have entered into a subscription agreement (the
"Subscription Agreement") pursuant to which a subsidiary of XGC, Hong
Kong Xiangguang International Holdings Limited ("Xiang Guang HK"), has
conditionally agreed to subscribe for the Subscription Shares at a
price of 10 pence per share for aggregate proceeds of US$5 million. The
proceeds of the Subscription will be used to fund the cash
consideration of the acquisition of the Land and for general working
Contemporaneously with the closing the of the Subscription Agreement,
the parties have also agreed to amend the current off-take agreement
between XGC and EMED Marketing Limited to increase the amount of copper
to be sold to XGC from 25% to 30% of the Mine's production for the
first 10 years of commercial mine production based on its current
reported copper reserves and have agreed to vary the right previously
granted to XGC to appoint a director to the EMED board of directors
(the "Board") such that the only requirement is that XGC's and Xiang
Guang HK's combined interest in the issued share capital of the Company
equals or exceeds 8%.
The Subscription Agreement is subject to certain conditions including
the approval of the Toronto Stock Exchange; the approval of the Chinese
National Development and Reform Committee and admission of the
Subscription Shares to trading on the AIM market ("Admission"). Such
conditions are required to be satisfied (or where possible, waived) on
or before 28 September 2012.
XGC currently holds approximately 10.84% of the issued and outstanding
shares of the Company. Accordingly, the transactions with XGC are
"related party" transactions as defined in Multilateral Instrument
61-101. The transactions with XGC are exempt from the requirement to
obtain a formal valuation and minority shareholder approval as the
value of the transactions are less than 25% of the market
capitalisation of the Company. Upon completion of the Subscription and
following the issue of the Consideration Shares, Xiang Guang HK will hold approximately 12.55% of the fully-diluted share capital and
approximately 13.48% of the issued capital of the Company. Although XGC
currently has the right to appoint a person to the Board provided
certain conditions are met, they have not yet done so and, as such, XGC
was not party to any discussions in respect of the transactions at the
board level and the transactions were negotiated at arm's length.
XGC has undertaken not to dispose, and procure that Xiang Guang does not
dispose, of any interest in the Subscription Shares for a period of 6
months following completion of the Subscription, save in certain
Application will be made in due course for Admission and an announcement
made at that time with respect to the expected date of Admission.
PDF available at: http://stream1.newswire.ca/media/2012/07/09/20120709_C6935_DOC_EN_16081.pdf
SOURCE EMED MINING PUBLIC LIMITED
For further information:
EMED Mining Harry Anagnostaras- Adams +357 9945 7843
RFC Ambrian Stuart Laing +61 8 9480 2500
Fox-Davies Capital Simon Leathers +44 203 463 5022
Fairfax I.S. PLC Ewan Leggat/Katy Birkin +44 207 598 5368
Bishopsgate Communications Nick Rome +44 207 562 3350
Proconsul Capital Andreas Curkovic +1 416 577 9927