Mindoro Advises Variation to Agreement for the Sale of Projects to Red Mountain
Mindoro Resources Ltd. (TSX VENTURE:MIO)(ASX:MDO)(FRANKFURT:WKN 906167)
("Mindoro", or "the Company") advises that it has agreed to vary the Share Sale
Agreement ("SSA"), signed on July 24, 2012, with Red Mountain Mining Ltd. ("Red
Mountain") and by which Mindoro sold the contractual rights to its direct and
indirect interests in the Batangas and Tapian San Francisco gold and copper-gold
assets in the Philippines.
Consideration for the sale, initially comprised the issue of 100 million fully
paid ordinary Red Mountain shares ("Shares") to Mindoro on October 30, 2012 (to
be held in escrow for 12 months, until October 30, 2013), together with 50
million Performance Shares, that would convert to fully paid ordinary shares in
Red Mountain upon Red Mountain achieving certain performance milestones by
October 30, 2013.
Subsequent to the sale, certain procedural aspects were not completed in the
time frame originally anticipated and, as such, a variation to the SSA ("the
Variation") has been agreed, to allow those aspects to be completed before the
Shares are released from escrow.
Under the terms of the original SSA, Mindoro was contractually obligated to
distribute a majority of the Shares to its shareholders upon expiration of the
escrow period. The Variation has removed this requirement, allowing Mindoro to
continue to hold or otherwise deal with the Shares in the manner that Mindoro
determines will return greatest value to its shareholders. Mindoro has, however,
agreed, that unless Red Mountain provides written consent, it will continue to
hold and refrain from dealing with the Shares until the sooner of April 30,
a. the execution of Novating Deeds of Assignment of contractual rights to
interests over the Batangas tenements; and
b. amendment of and completion of Mines and Geosciences Bureau
(Philippines) registration of the Technical Service Agreement between
Red Mountain 100% owned subsidiary MRL Gold Inc. ("MRL Gold") and
tenement owner and 40% owned subsidiary of MRL Gold, Egerton Gold
Mindoro does not currently intend to distribute or sell the Red Mountain Shares
upon expiration of the hold period. In the event that the removal of the
distribution requirement should trigger an additional ASX imposed escrow period,
a press release will be issued advising the market.
The Variation also provides that the joint venture rights to the Tapian San
Francisco tenements ("TSF tenements"), which were originally required to be
transferred to Red Mountain by October 30, 2012, will now be required to be
transferred by October 30, 2013. If the transfer of joint venture rights to the
TSF tenements and the transfer of interests in other tenements is not completed
by October 30, 2013, Red Mountain will have the right to relinquish its
contractual rights to those tenements and "buy back" Shares held by Mindoro to
the value of those contractual rights. As Red Mountain does not consider the TSF
tenements to be part of its current core exploration focus, Mindoro anticipates
reacquiring these tenements in early November.
Red Mountain has notified Mindoro that the milestones that would trigger
conversion of the Performance Shares to full voting shares will not be met by
October 30, 2013, and, therefore, the 50 million Performance Shares will convert
to a single Red Mountain share only on October 31, 2013.
On behalf of the Board of Directors,
Tony Climie, CEO
Mindoro is a Tier 1 Issuer trading on the TSX Venture Exchange (MIO), Australian
Securities Exchange (MDO) and Frankfurt Stock Exchange (WKN 906167). Mindoro has
a 75% interest and an option to acquire the remaining 25% in the Agata Nickel
Project, Mindanao, and the Pan de Azucar Sulphur-Copper-Gold Project, Iloilo.
TVI Pacific Inc. has the option to earn up to a 60% interest in these projects
by meeting the earn-in requirements outlined in the June 24, 2013, release.
Mindoro also holds a 20.8% stake in ASX listed Red Mountain Mining (ASX:RMX),
which has a 100% direct and indirect interest in the Batangas gold and
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
This release may contain forward-looking statements including management's
assessments of future plans and operations, and expectations of future
production. These statements are based on current expectations that involve a
number of risks and uncertainties, which could cause actual results to differ
materially from those anticipated. These risks include, but are not limited to,
the risks associated with the mining and exploration industry (e.g. operational
risks in development, exploration and production; delays or changes in plans
with respect to exploration or development projects or capital expenditures; the
uncertainty of reserve estimates; the uncertainty with respect to results of
exploration, the uncertainty of estimates and projections relating to production
and the uncertainty of the availability of capital). The assumptions used in the
preparation of such statements, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance should not
be placed on forward-looking statements. The Company does not undertake to
update forward-looking statements except where required to do so by law.
FOR FURTHER INFORMATION PLEASE CONTACT:
For investor relations inquiries, please email
firstname.lastname@example.org, or telephone one of the following:
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Penny Gould: +780.719.8895, or
Jeanny So, CHF Investor Relations: +1 416 868 1079 ext. 225