Thursday August 17, 11:33 am Eastern Time
Press Release
SOURCE: Biogan International, Inc.
via BCE Emergis e-News Services
Biogan International Announces Completion Of Asset Purchase From Hechi Industrial Co., Ltd.
Boise, Idaho
Biogan International, Inc. (OTC Bulletin Board: BIGM - news) announces that it has finalized the terms of its Asset Purchase Agreement with Hechi Industrial Co, Ltd., a private mining company organized in the People's Republic of China, and has completed the acquisition contemplated thereby. The acquired assets include a 9% interest in the Gaofeng Mining Co., Ltd., a 70% interest in the Guizhou Louxia Coal Co., Ltd., and all of the assets and liabilities of six operating divisions of Hechi. Biogan has transferred all of these acquired assets to a Chinese cooperative joint venture (CJV) named Guanghe Metals Co., Ltd. Biogan is entitled to 95% of the net profits generated from the operations of the CJV and a 92% interest in the remaining assets of the CJV upon any liquidation or dissolution of the CJV. The CJV has obtained its Certificate of Approval and its Business License from the governmental authorities of the People's Republic of China to operate the assets contributed to the CJV.
The CJV has three main areas of operations, consisting of refining, mining and trading of base metal products as follows:
REFINING: The copper refinery can produce 6,000 metric tons of copper per year. By-products from the refining process include 30 metric tons of silver (1 million oz.), 120 kg of gold (4,000 oz.) and over 18,000 metric tons of sulphuric acid per year. Final products are sold within China.
MINING: The CJV is operating three mines, two of which are polymetallic base metal mines (zinc, lead, antimony and tin) and one that is a coal mine.
The CJV has a 9% interest in the Gaofeng Mine, which is believed to be one of the richest base metal mines in China. The mine operates at a daily mining rate of 1,100 metric tons. Mining reserves have been estimated at 7.43 million metric tons at a combined metal grade of 23-25%, composed of 2% tin, 4-5% antimony, 5-6% lead, 10-12% zinc, 100 grams per ton (3 oz/ton) silver, and 120 grams per ton indium. Another deposit of similar size is believed to lie below the main deposit. The CJV is in the process of obtaining mining permits for this deposit. Reserves of this mine are believed to exceed 2 million metric tons of contained metals.
The CJV also operates the Wuxu Mine (zinc-lead-antimony). It is currently producing at a rate of 300 metric tons per day. The average grades of the ore are 3% antimony, 10% zinc, 4% lead and 59.17 grams per ton (1.7 oz/ton) of silver. Reserves are estimated at 450,000 metric tons of contained metals at a grade of 17% combined metal. Proven resources of Wuxu Mine are 100,000 metric tons of antimony, 250,000 metric tons of zinc and 100,000 metric tons of lead. There is a flotation mill on site with a rated capacity of 100 metric tons per day.
The CJV has a 70% interest in the Guizhou Louxia Coal Mine Co., Ltd., which owns a coal property with estimated reserves of 300 million tons of anthracite resources within an area of 30 km2 (10 sq. mi.) in the Guizhou Province of China. The thermal capacity of the coal is 7000 cal/g. Guizhou Louxia Coal Mine Co., Ltd. is currently applying for the mining permits for a larger area. The Guizhou Louxia Coal Mine is now operating at an annual rate of 40,000 tons.
TRADING: The CJV also operates the Non-Ferrous Metals Trading Company, which markets mineral products of the CJV as well as other mines in the Hechi Prefecture located in Southeastern China. It trades more than 20 major minerals, including electrolytic copper, blister copper, zinc concentrates, tin concentrates, tin ingot, lead concentrate, titanium, high grade lead-antimony, manganese, wolfram, iron, mercury, aluminium and bauxite.
Most of Hechi's senior management, engineers and professional employees are now employed by the CJV. This will provide the CJV with a competent workforce that will allow a smooth transition on the operational side and will complement Biogan's senior management expertise in the mining industry.
Given the recent changes in the Chinese economy and its sustained growth, Biogan, through its CJV, plans to become an important player in the Chinese copper refining and base metal industry. Biogan's objective is to build on existing assets and human resources to take advantage of what it believes are promising Chinese mining opportunities and to emerge as a large base metal refiner in China.
More specific details of the acquisition are available in Biogan's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 15, 2000.
This news release contains forward looking statements relating to future events or future financial performance that involve risks and uncertainties. Such statements can usually, but not always, be identified by terminology such as ``may,'' ``will,'' ``should,'' ``expects,'' ``plans,'' ``anticipates,'' ``believes,'' ``estimates,'' ``predicts'', ``potential'', ``intends'', or the negative of such terms or comparable terms. These statements are only predictions and actual results could differ materially from those anticipated in these statements based upon a number of factors including those identified in the Company's filings with the SEC. Investors are cautioned that all forward-looking statements involve risks and uncertainties of the industries in which the Company operates and/or proposes to operate, including without limitation, uncertainties of mineral recovery, foreign operation and exchange uncertainties, impact and success of joint venture projects, availability of raw materials, industry partnerships, foreign government laws and regulations, market acceptance of products, the impact of competitive products, general market conditions, and other risks. These forward-looking statements are made in reliance on the ``safe-harbor'' provisions of the Private Securities Litigation Reform Act of 1995, as amended.
CONTACT: Gilles Laverdiere, President and CEO (450) 651-6701 Ronald J. Tolman, Vice President (208) 378-0722
SOURCE: Biogan International, Inc. |
