CENTRAL Asia Resources (CVR) has received first funds from the sale of its 90% interest in the Dalabai Gold Project in southern Kazakhstan. The purchaser of the operating project is private Kazakh entity Uroven OMP LLP.
Legal documentation for the sale of CVR’s subsidiary companies associated with Dalabai has progressed and includes a service agreement for Uroven to operate the project until final transfer of subsidiary company ownership is made.
The free floating of the Kazakh currency and immediate devaluation on August 20 had no impact on the terms and conditions of the sale, which is valued at a total of Aus$6.9 million.
A payment of US$95,000 was made in late August from which some legal and corporate advisory fees were subtracted in Kazakhstan. Net funds of Aus$77,000 were received in Australia shortly after.
Total funds anticipated are:
- Dalabai debt, including bank debt, as at July 15 of US$2.6 million (Aus$3.46 million);
- Gold loan repayments of 1480 ounces of gold valued at approximately Aus$2.3 million using gold price of Aus$1550/ounce. The loan was established in 2013 and 2014 between the company and a private entity, West Asia Minerals Ltd;
- A cash payment of US$300,000 (Aus$400,000) upon execution of a formal sale and purchase agreement;
- A payment of US$200,000 (Aus$266,000) upon commencement of gold production if production commences by September 15, otherwise on December 15, 2015; and
- A 1% gross royalty from Dalabai production, capped at US$360,000 (Aus$480,000) commencing January 1, 2016 and paid during 2016 and 2017.
Mining at Dalabai, which is about 2.5 hours by road from Almaty, began in July 2014 but was halted in October 2014 due to delays with debt funding from Halyk Bank. During the June quarter of 2015 CVR’s care and maintenance team was replaced by a Halyk Bank-funded team.
Under a court order, December quarter production amounting to 144 ounces of gold and 1126 ounces of silver was sold and proceeds of US$190,000 were disbursed to CVR’s Dalabai employees for salaries owed. Remaining Dalabai employees were made redundant at the end of May.
CVR retains the Altyntas project, which includes the Altyn Tas, Kepken and Kengir prospects. In late May an application for a three year extension of the Altyn Tas exploration licence was formally granted with an expenditure commitment of US$235,000. This allows CVR to move forward with exploration and development of Altyn Tas, Kepken and Kengir deposits.