Canadian-based natural resource company Spur Ventures says the sale of its wholly-owned Chinese subsidiary Spur Chemicals (BVI) could net the company up to $14 million.

A cash sale of $9.25 million has been agreed upon through a share purchase agreement with Hong Tang Vision, however the conditions include an additional payment of $4.75 million if Chinese authorities remove a current phosphate fertilizer obligation at a future date.

The sale of BVI, which is expected to be approved by shareholders next month, is the first stage of Spur’s Chinese exit strategy. It also means Spur will no longer own indirect interests in two Chinese joint ventures through BVI - Yichang Maple Leaf Chemicals and Yichang Spur Chemicals, which produce phosphate fertilizers that are currently in over-supply in Chinese markets.

Spur says it will then be able to focus its full resources and funding on its strategy to acquire advanced development or operating assets in the mineral resource sector. Since 2008, the company has assessed several opportunities, but none to date have offered satisfactory shareholder returns.

The company’s chairman Steven Dean says the decision to exit China will allow the company to move into businesses and mineral projects in lower risk jurisdictions where Spur’s skills and knowledge could enhance the success of the venture.

“With the $9.25 million proceeds from the sale of Spur BVI, the company will have approximately $30 million in cash or cash equivalents, to invest in executing the business strategy announced in October, 2008.

“The successful sale of our Chinese interests will clear the slate of any contingent liability to allocate our capital in China to protect our rights there, and clears the path to fully embrace our current business plan. We believe the current volatile capital markets combined with the strong underlying fundamentals of certain mineral commodities, will provide Spur the long awaited capacity to get back on track to generate real returns to shareholders,” Steven Dean says.

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