Victory West Moly has received Aus$500,000 which represents the first tranche of the Aus$1 million commitment fee from its joint venture partner China Guangshou Group Corp (CGGC) as part of their obligations to invest in the Malala Molybdenum Project in North Sulawesi, Indonesia.
Victory West is now finalizing the required executed administrative letters upon which, CGGC will make the second and final payment.
On November 27, 2010, Victory West and CGGC entered into a memorandum of agreement detailing the terms of the acquisition by CGGC of a majority interest in the Malala project.
CGGC will acquire a 65% interest in consideration for sole funding 100% of all expenditure to large scale production. Victory West will retain a 'free carried' interest of 27.5% through its related parties. CGGC will also pay a US$1 million commitment fee.
Under the terms of the agreement, a number of key exploration, development and production milestones are required to be met by CGGC:
- Exploration - A minimum of 10,000 metres drilling to be reviewed by a geological consulting group of international standard. Definition of a suitable NI 43-101/JORC resource that is capable of commercial production.
- Development - Development and construction of the project for commercial production including mine development, processing plant and associated infrastructure.
- Early production - Delivery of early production opportunities from high grade mineralization identified during exploration within 24 months.
- Large scale production - Subject to a total resource of no less than 150 million tonnes at 840ppm moly CGGC will begin large scale open pit production by 2016.
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.