Shearwater Regulatory News (SWG)

29 Sep 2005 07:03

Aurum Mining PLC29 September 2005 For immediate release 29 September 2005 AURUM MINING PLC ("Aurum" or "the Company") Enters into Agreement to acquire majority stake in Russian exploration project Aurum Mining plc (AIM: AUR), the company formed last year to acquire gold andother mineral extraction projects in the Former Soviet Union ("FSU"), is pleasedto announce that it has entered into a conditional agreement with Loyal WealthyLimited ("Seller") to purchase 51 per cent of the share capital in OpenJoint-Stock Company Geocentr ("Geocentr"), a Russian company that owns anexploration licence and abandoned gold mine in the Russian Far East, for aninitial consideration of $371,000. The agreement is conditional upon, interalia, the completion of satisfactory due diligence by Aurum on Geocentr. Aurum believes that Geocentr will give the Company exposure to a significantexploration opportunity. The acquisition of a majority stake in Geocentr isconsistent with the Company's strategy of building a portfolio of assets in theFSU. Geocentr's principal asset is the Igumenskoye-Klin exploration licence in theMagdan Oblast region of the Russian Far East ("Project"). The licence, whichextends to 48 sq km, includes the abandoned Igumenov gold mine. Between 1944 and1967 Igumenov yielded 382,000 ozs of gold at an average grade of 9.8 g/t. Aurumbelieves that Igumenov may have further lower grade reserves and that it may bepossible to reopen and exploit the mine using modern techniques via a pit miningoperation. Geocentr's current activity is limited to managing the explorationpotential of the licence area and as a result it has no significant income. Itincurred losses for the year ended 31 December of £0.2 million. The initial consideration for the Geocentr shareholding is $371,000 which ispayable in cash. Further consideration of up to a total of $2.35 million("Further Consideration") is payable in two stages dependent on the measured andindicated ore reserves of gold at the Project as stated in the final feasibilityreport. At the option of the Seller, the Further Consideration may be appliedto subscribe for up to a maximum of 2,600,000 ordinary shares in the Company. Iffor whatever reason the acquisition does not complete, the benefit of theoutstanding loan of $170,000 to Geocentr will be assigned from Aurum to theSeller. Commenting on the agreement, Sean Finlay, Aurum's Chairman, said: "Theacquisition of a majority stake in Geocentr would bring a significant newexploration opportunity to Aurum. The licence owned by Geocentr has theattraction of combining a mine that may be capable of further exploitation witha significant exploration asset. Geocentr would also provide an ideal complementto our existing asset in the Kyrgyz Republic, which is moving closer toproduction." For further information: Aurum Mining plc Tel: 020 7478 9050Sean Finlay, ChairmanMark Jones, Chief Executive W H Ireland Tel: 0121 616 2101Tim Cofman Buchanan Communications Tel: 020 7466 5000Mark Court Notes for editors About Aurum Mining Aurum Mining joined the AIM market of the London Stock Exchange in May 2004 withthe strategy of seeking, evaluating and acquiring gold and other mineralextraction projects in the Former Soviet Union (FSU). In January 2005 theCompany completed its first acquisition, giving the Company an explorationlicence over a gold and copper project in the Kyrgyz Republic. In its StateRegister, the State Commission of Resources of the Kyrgyz Republic has included21.7 million tonnes of C1 and C2 reserves from the project, amounting to goldand gold equivalent of more than 1.5 million ozs. This information is provided by RNS The company news service from the London Stock Exchange