Last checked at 27 Jun 2014 09:10
China Nonferrous Gold Limited
(“CNG” or the “Company”)
External Power Supply Construction Contract
China Nonferrous Gold Limited (AIM: CNG), the mineral exploration and development company currently developing the Pakrut gold project (the “Project”) in the Republic of Tajikistan (“Tajikistan”) announces that it has terminated the contract with Shanxi No.3 Electric Power Construction Company (“Shanxi”) for the construction of the external power supply network for the Project (the “Construction Contract”) and replaced it with a consultancy arrangement with Shanxi (the “Consultancy Agreement”).
Shanxi was unable to obtain the relevant licence to perform the Construction Contract. However, Limited Liability Company Pakrut (“LLC Pakrut”), CNG’s wholly-owned subsidiary, does have the necessary licences to act as contractor to construct the external power supply network. Therefore, under the Consultancy Agreement, Shanxi will provide consultancy services to CNG which will direct and supervise LLC Pakrut to construct the power supply network.
Terms of the Consultancy Agreement
The total estimated cost of construction for the external power supply network under the Consultancy Agreement remains at RMB 150,444,000 (approximately US$23.88 million, based on the fixed exchange rate of 6.3 RMB to the US Dollar, for the repayment of the RMB loan pursuant to the loan agreement (the “Loan Agreement”) entered into on 24 May 2012 with China Nonferrous Metals Int’l Mining Co., Ltd (“CNMIM”)). The cost of the Consultancy Agreement will be satisfied by a drawdown under the Loan Agreement.
Shanxi will receive a fee under the Consultancy Agreement equal to the difference between the target costs of construction and the actual costs of construction.
The power supply line project includes a 73km long transmission line with 266 iron towers and two substations in Hamza and Pakrut. As at the date of this announcement, most of the materials and equipment have been shipped to the site, the foundations for 185 towers have been excavated, the foundations for 124 towers have been concreted and 82 towers have been installed. The construction of one substation in Hamaza has also commenced.
Pursuant to the terms of an agency agreement entered into on 24 May 2012 between the Company and CNMIM, the Company’s largest shareholder with approximately 38.44 per cent of the issued share capital, CNMIM was appointed as the Company’s agent for the purposes of entering into certain agreements in connection with the development of the Project. Accordingly, following approval by the Company, CNMIM entered into the Consultancy Agreement as agent for the Company.
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
Hume Capital
Jon Belliss, Guy Peters
Tel: +44 (0)20 3693 1470
Blytheweigh
Paul Weigh, Halimah Hussain
Tel: +44 (0)20 7138 3204
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 developing the underground mine and surface infrastructure.
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.
Copyright Business Wire 2014