INDOCHINE Mining has signed a Heads of Agreement with Capital Mining to sell a majority interest in its Cambodian gold exploration assets. Although the due diligence on the proposed sale has progressed significantly, Indochine says the transaction is taking longer to complete than originally envisaged.
Capital Mining says it is continuing to work with Cambodian authorities on associated agreements to meet local regulatory requirements, and the company feels it is in the final stages of this process.
The agreement was announced in early October 2013 and involves Capital acquiring up to an 85% shareholding in Indochine Resources, a wholly-owned subsidiary of Indochine Mining, which owns assets in Cambodia. The agreement provided for the sale of an initial 55% interest subject to satisfaction of the following conditions:
- Satisfactory due diligence to be completed within 45 days of the execution of the agreement;
- The parties executing a formal share sale agreement and formal shareholders’ agreement;
- Completion of a capital raising by Capital to raise a minimum of $3 million through the issue of fully paid ordinary at an issue price to be determined;
- Capital obtaining all necessary shareholder approvals pursuant to the ASX Listing Rules, Corporations Act 2001 or any other law, including but not limited to, approval pursuant to Item 7 of Section 611 of the Corporations Act and ASX Listing Rules 10.1 and 11.1.2;
- Capital obtaining all necessary third party approvals or consents to give effect to the matters set out in the agreement to allow it to lawfully complete the matters as set out in the agreement;
- Capital obtaining all necessary regulatory approvals pursuant to the ASX Listing Rules, Corporations Act 2001 or any other law to allow it to lawfully complete the matters as set out in the agreement.
Indochine also agreed to grant the Capital the right to earn up to a further 30% of the shares in the capital of Indochine Resources as follows:
- An additional 15% following sole funding a total of $6 million on exploration expenditure, within three years of settlement; and
- A further 15% following sole funding a further $4 million on exploration expenditure for a total expenditure of $10 million within three years of settlement.
The assets are within the Ratanakiri project in the far northeast of Cambodia. Intrusive centres, potentially associated with copper and gold mineralization, have been mapped here within a deeply eroded zone of typically Permo-Triassic meta-sediments and volcanics exposed in a high standing mountainous block on the Cambodia -Laos-Vietnamese borders.
Alluvial gold workings and favourable host rocks for large tonnage deposits make this area very prospective for delineating economic gold and copper deposits.