MoU signed w/ Chinese Vanadium Mine6 Jun 2019 10:54
Altona (NEX: ANR.PL), a mining investment company with significant coal resources in Australia, announces that it has entered into a Memorandum of Understanding (“MoU”) with Shaanxi Qianyan Vanadium and Magnesium Mining Industry Ltd Company (“Shaanxi Mining”), the owner of an operational vanadium mine in China, with the aim of forming a Joint Venture Company (“JV Company”) in which it is expected that Altona will eventually become the controlling shareholder.
Both the Company and Shaanxi Mining have commenced due diligence to examine the feasibility of this partnership. However, until a formal joint venture agreement has been signed, the deal is conditional, and not binding on either the Company or Shaanxi Mining.
There can be no guarantee that the discussions in respect of the MoU signed with Shaanxi Mining will be successful and the terms of any relationship are yet to be formulated. However, this is a positive step towards our goal of acquiring an investment in a Vanadium mine.
Information on the MoU
The due diligence process is expected to take up to six months to complete and is dependent upon a number of factors, including Shaanxi Mining being granted a provincial government permit which will allow it to enter into an international joint venture agreement with Altona. During this period, Shaanxi Mining will commission a mineral resource classification report in accordance with the Australian Joint Ore Resources Committee Code (“JORC”). This report is expected to take some five months to complete and will form the basis of a valuation for any acquisition.
When completed the report will help provide a more accurate valuation of the assets of Shaanxi Mining which will determine the quantum of Altona’s initial interest in the JV Company. The consideration for Altona’s acquisition of shares into the JV company is expected to be either cash, shares or a combination of the two.
The successful pursuance of this potential acquisition, and indeed the ability of Altona to pursue all of its strategies, requires the Company to obtain further funding. As previously announced the Company is considering a number of funding options and this may involve a strategy to re-list its shares on the London Stock Exchange, via either AIM or a listing on the Standard Market, which will be planned to coincide with the signing of the joint venture agreement. The board is of the opinion that the liquidity and access to capital provided by either AIM or the Standard Market will be more suited to Altona’s enlarged status and the owner of a revenue generating vanadium mine.
Information on the Vanadium Mine
The Directors understand that Shaanxi Mining, based in Xi’an City, Shaanxi Province, is the majority (80%) shareholder in Shaanxi Shangnan Haodi Youzhi Limited Company which in turn owns 99.5% of the Shaanxi Shangnan Haodi Vanadium Mining Industry Company Ltd (“Shaanxi Vanadium”), which owns and operates a vanadium mine in Shangnan County, Shaanxi Pr
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