Aspire Mining has entered into a binding agreement to acquire Xanadu Mines’ interest in a coking coal joint venture in northern Mongolia. The transaction covers Xanadu’s 50% interest in the Ekhgoviin Chuluu JV (ECJV) with the Noble Group retaining its 50% interest. The ECJV has a 60% interest in the Nuurstei project with the ability to raise this to 90%.
Aspire says the transaction fits neatly into its strategy to explore and develop Mongolian metallurgical coal projects, and the opportunity to do this jointly with the Noble Group serves to enhance the existing strategic alliance between the two which includes a number of transactions relating to project financing, supply chain logistics, port and rail capacity access.
Aspire will acquire Xanadu’s interest by issuing 10 million shares in Aspire to Xanadu dependent upon the ECJV entering into an agreement to undertake feasibility studies in the Nuurstei project area or upon the Mineral Resource Authority of Mongolia granting a mining licence over all or part of the Nuurstei project area.
Aspire has agreed to issue a further 5 million shares to Xanadu in the event that 30 million tonnes of JORC-compliant resources are identified in the project area. It will assume Xanadu’s obligation to pay for an additional interest in the project and will pay the minority vendors US$200,000 on the grant of a mining licence over the project area. The ECJV will then hold a 90% interest in the project with the minority 10% interest to be free carried through to production.
Nuurstei is just 10km from the provincial capital of Moron and is relatively close to a public sealed road being constructed connecting Moron to Erdenet. Nuurstei is also within a relatively short trucking distance to the proposed Northern Rail Line being developed by Aspire’s subsidiary, Northern Railways.
Preliminary indications are that Nuurstei coking coal could also be a useful blending partner for Aspire’s Ovoot project coking coal, and there would be a number of other operational and marketing synergies between the two operations. www.aspiremininglimited.com