CAPITAL Mining has struck an agreement to acquire a majority stake in Indochine Mining subsidiary Indochine Resources, which owns gold assets in Cambodia, wiIndochine Mining and Capital have signed a binding heads of agreement whereby Indochine has agreed to sell an initial 55% interest of the issued capital of Indochine Resources.
The acquisition of the initial stake is subject to satisfaction of a number of conditions, including satisfactory due diligence, the parties executing a formal share sale agreement and Capital completing a capital raising to raise a minimum of $A3 million.
Additionally, Capital will need to obtain all necessary shareholder approval, third party and regulatory approvals.
Capital Mining’s annual general meeting is scheduled for November 29, with the notice of meeting – incorporating the proposed acquisition – expected to be dispatched to shareholders by the end of this month.
A non-refundable deposit of $20,000 has been considered as part of the initial 55% acquisition upon the signing of the agreement.
Meanwhile, Indochine Mining has agreed to grant Capital the right to earn a further 30% of the shares in Indochine Resources.
This would occur via Capital sole funding a total of $6 million on exploration expenditure within three years of settlement, which would give it an extra 15% stake while the final 15% interest would be acquired through the funding of a further $4 million.
Indochine Mining will have the right to claim back the shares should the company fund less than $3 million on exploration expenditure within two years of settlement.
Shares in Capital soared 37.5% on release of the heads of agreement details to trade at 1.1c.
On completion of taking the 85% stake in Indochine Resources, it is expected that Capital and Indochine Mining will form a joint venture and be required to fund the company on a pro rata basis.
Indochine has a large tenement holding in Cambodia, with the Ratanakiri project lying in the remote far northeast of the country and comprising 14 licences covering 2900sq.km.
It is understood alluvial gold workings and favourable host rocks for large tonnage deposits make the area very prospective for delineating economic occurrences.
Capital said further information regarding the Cambodian assets would be released in due course.
In more company news, Capital said it had completed a $450,000 placement at an issue price of 1.2c per share, with the funds to be used for acquisition of new projects as well as working capital purposes.
Meanwhile, Indochine Mining said it had completed the recently announced placement and the accelerated institutional component of the non-renounceable offer as part of a $26.3 million capital raising.
A total of $5.5 million has been raised from the placement and offer, with settlement expected to occur on October 15.th the news sending the company’s shares soaring.
Source: PNGIndustrialNews.net