Last checked at 7 Sep 2015 09:52
China Nonferrous Gold Limited 中国有色黄金有限公司
(“CNG” or the “Company”)
Award of Smelting and Processing Agreement
China Nonferrous Gold Limited 中国有色黄金有限公司 (AIM: CNG), the mineral exploration and development company currently developing the Pakrut gold project (the “Project”) in the Republic of Tajikistan (“Tajikistan”) is pleased to announce that it has awarded China Nonferrous Hongtoushan Fushun Mining Group Co., Ltd(“CNHFMG”) a processing and smelting agreement relating to the Project (the “Agreement”).
CNHFMG was awarded the Agreement following a competitive tender process undertaken by the Company with multiple proposals.
Terms of the Consultancy Contracts
Pursuant to the Agreement, CNHFMG will carry out all production, production support and administrative activities relating to the processing plant, smelting plant, flotation tailing storage and smelting tailing storage.
The contract is for a period of 18 months, representing a 2 month production preparation period, a 4 month trial production period and a 12 month production period.
Under the terms of the Agreement CNG will pay to CNHFMG an amount of RMB 17.99 (approximately US$2.8) per gram of finished gold once the Project commences the 12 month production period. Prior to this period the Company will cover the labour and associated costs of CNHFMG. Once in production, in the event the recovery of the plant is above the Beijing General Research Institute of Mining and Metallurgy forecast rate over the life of production of 82.99 per cent., CNHFMG will share 40 per cent. of the profits from the upside directly due to the increased recovery. In the event recovery is below 75 per cent., CNHFMG will bear 20 per cent. of any loss incurred by the Company from the Project due directly to recovery levels.
Related Party Transaction
CNHFMG is an associate of CNMIM and, as a result, pursuant to AIM Rule 13, the entry into the Agreement is deemed to be a related party transaction. The independent directors of the Company, namely Abuali Ismatov, Leonard Lee (Li Li), Wang Yubin and Che Pizhao, having consulted with the Company’s Nominated Adviser, Investec Bank plc, have concluded that the terms of the transaction are fair and reasonable insofar as shareholders are concerned.
For further information please visit the Company’s website (www.cnfgold.com) or contact:
China Nonferrous Gold Limited
David Tang, Managing Director
Tel: +86 10 8442 6681
Investec Bank Plc
Jeremy Ellis, George Price
Tel: +44 (0)20 7597 5970
Project Summary
The Pakrut gold project, of which CNG has 100 per cent ownership, is situated in Tajikistan approximately 120km northeast of the capital city Dushanbe. Pakrut is located within the Tien Shan gold belt, which extends from Uzbekistan into Tajikistan, Kyrgyzstan and Western China, and which hosts a number of multi-million ounce gold deposits.
CNG is currently in a construction phase with mining contractors on site constructing the mine, plant and tailings dam.
About Tajikistan
Tajikistan is a secular republic located in Central Asia. The country is a member of the Commonwealth of Independent States and the Shanghai Cooperation Organisation. Tajikistan hosts numerous operating precious metal mines as well as the largest aluminium smelter in Central Asia. CNG's management team has extensive experience in the mining industry in Tajikistan.
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