Asia Base Metals has signed a purchase agreement for acquisition of a 90% share in the Laos company that holds the exclusive rights to explore and mine the Vientiane Potash Project.
Asia Base says the agreement with AXN Group LLC includes the issue of 1 million common shares at the closing of the transaction. There are also extra payments of up to Can$3.3 million and 20 million shares if specific financing, resource, feasibility and mine construction milestones are reached. The company has also agreed to a deferred payment structure if the vendor expands the property within one year of the transaction.
Asia Base says an expansion of 39sqkm of contiguous mineral rights will bring the project to a total of 55sqkm at no additional cost. The Vientiane potash property takes in 16.5sqkm in the Huaxieng-Xaithany area of Vientiane province.
Asia Base president Raj Chowdhry says, “We are pleased to have entered into a definitive agreement for the acquisition by the company of an indirect 90% interest in the Vientiane potash property in Laos. Since potash is one of the key components of fertilizer, and with China, India and Indonesia representing three of the largest markets for agricultural products in the world, and located on the doorstep of Laos, management believes that Vientiane represents a world-class opportunity.”
The transaction remains subject to approval of the TSX Venture Exchange, required consents being obtained, the company being satisfied with the results of its due diligence, the company obtaining an independent NI 43-101 compliant technical report and certain authorizations being issued by the local government.
Potash salt deposits in the Vientiane sedimentary basin have been estimated to be as high as 50 billion tonnes. In 2006, the width of the deposit in the nearby Savannakhet province was confirmed to be 70-85 metres by exploratory drill holes.
Asia Base Metals intends to raise up to $575,000 through a non-brokered private placement. The proceeds of the private placement will be used to fund due diligence respecting the company’s previously announced Laos Potash Project and for general working capital purposes.