Asian Mineral Resources Announces Divestment of Ban Phuc Nickel Mine
May 14 2018 - 8:00AM
Asian Mineral Resources Limited (“AMR” or the “Company”)
(TSX-V:ASN) is pleased to announce that it has entered into an
agreement (the “Sale Agreement”) to divest its 90% ownership
interest in the Ban Phuc Nickel Mine in Vietnam to Ta Khoa Mining
Limited, a company established by its longstanding in-country
senior manager, Stephen Ennor. Completion of the Sale Agreement is
subject to AMR shareholders’ approval and certain customary
conditions of closing, including approval of the TSX Venture
Exchange.
Duncan T. Blount, President and CEO of AMR
stated:
“As previously announced on April 24, 2018, the
focus of our strategic review has been the sale of all of our
assets comprising the Vietnam operation and we are pleased to have
executed this divestment. Stephen Ennor is a highly experienced
mining professional who has served in AMR’s senior leadership team
based in Vietnam for over 10 years. He has significant experience
operating in the mining sector in Vietnam and has vast knowledge of
our Vietnamese assets. This transaction will allow AMR to achieve
an orderly and clean exit from Vietnam and move forward to focus on
exploring new investment opportunities in resource based companies
or other potential strategic options.”
Terms of Sale
Agreement
Under the terms of the Sale Agreement, the
consideration for the sale is the assumption of existing trade
payables, tax and other creditor liabilities of AMR’s subsidiary,
Ban Phuc Nickel Mines LLC (“BPNM”), totalling over US$3,500,000.
Further, AMR will retain the rights to receive 50% of any sale
proceeds in excess of US$2,000,000 from the sale of the Vietnamese
assets completed less than 6 months after closing of the Sale
Agreement, and 25% of any sale proceeds in excess of US$2,000,000
from the sale of the Vietnamese assets completed between 6 and 18
months after closing of the Sale Agreement (the “Sale Proceeds”).
The transaction will be put to AMR shareholders for approval at a
meeting to be held in July 2018.
Financial Support from Pala
Investments
In addition to the recent loans announced on
April 16 and 24, 2018 totalling a principal amount of US$560,000
advanced by Pala Investments Limited (“Pala”) to AMR to assist AMR
with funding working capital requirements and redundancy payments
to the employees of BPNM, Pala will advance a further loan to AMR
of up to a principal amount of US$70,000 to cover certain
transaction costs and working capital requirements of BPNM for the
period up to the closing of the Sale Agreement. The new loan
carries the same interest rate of 5% per annum, and AMR and Pala
have agreed that all such outstanding loans from Pala shall have a
fixed maturity date of March 31, 2019 subject to earlier repayment
out of the receipt by AMR of any Sale Proceeds. The loans from Pala
are unsecured and AMR continues to have the right at any time to
repay some or all of the outstanding loans (without restriction or
prepayment charges).
About AMR
AMR owns and operates a nickel mine with
historical nickel sulphide production, and is exploring for
additional high-grade nickel assets in Vietnam. AMR commenced
commercial production from its 90%-owned Ban Phuc Nickel Mine in
Vietnam in mid-2013. As of 30 September 2016, the Ban Phuc Nickel
Mine has produced a total of c. 20,700 tonnes of nickel and c.
10,100 tonnes of copper contained in concentrate, plus a cobalt
by-product since the beginning of its mine life. Mining and
processing operations at Ban Phuc were suspended in September 2016
and operations were transitioned to a care and maintenance
scenario. In addition to in and near-mine expansion projects, Ban
Phuc provides a platform from which AMR can continue to focus on
developing a new nickel camp within its 150km2 of concessions
located throughout the highly-prolific Song Da rift zone, where AMR
has a number of advanced-stage nickel exploration targets.
For further details on AMR, please refer to the
technical report entitled “NI 43-101 Technical Report – Ban Phuc
Nickel Project” dated February 15, 2013 and the technical report
entitled “NI 43-101 Technical Report – Ta Khoa Concession’’ dated
March 3, 2017, both available on SEDAR or the AMR website
www.asianmineralres.com
Forward-Looking
Statements
Statements made in this news release may be
forward-looking and therefore subject to various risks and
uncertainties. Such statements can typically be identified by
terminology such as ‘‘may’’, ‘‘will’’, ‘‘could’’, ‘‘should’’,
‘‘expect’’, ‘‘plan’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘intend’’,
‘‘possible’’, ‘‘continue’’, “objective” or other similar
expressions concerning matters that are not historical facts.
Certain material factors or assumptions are applied in making
forward-looking statements and actual results may differ materially
from those expressed or implied in such statements. AMR does not
undertake to update any forward-looking statements; such statements
speak only as at the date made.
Going Concern
Risk
As described in AMR’s most recent Management
Discussion & Analysis, the continuing operations of the Company
are dependent upon its ability to continue to raise adequate
financing, to commence profitable operations in the future, and
repay its liabilities arising from normal business operations as
they become due. There remains a significant risk that the Company
is unable to find alternative sources of financing for on-going
working capital requirements. These material uncertainties cast
significant doubt upon the Company’s ability to continue as a going
concern.
Failure to obtain sufficient financing could
result in a delay or abandonment of the Ban Phuc Nickel Mine in Son
La, Vietnam and could force the Company into reorganization,
bankruptcy or insolvency proceedings. Additional financing may not
be available when needed or, if available, the terms of such
financing might not be favourable to the Company and might involve
substantial dilution to existing shareholders. Failure to raise
capital when needed would have a material adverse effect on the
Company’s ability to pursue its business strategy, and accordingly
could negatively impact the Company’s business, financial condition
and results of operations.
For further
information:
Paula KemberChief Financial OfficerTelephone:
(416) 360-3412
Neither the TSX Venture Exchange
nor its Regulation Services Provider (as that term is defined in
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
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