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Gold/Mining/Energy : Armada Gold 10 Million oz of Gold & 1 billion lb of Cu !
AAU 0.380-5.0%Sep 29 5:00 PM EST
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To: virginijus poshkus who wrote (517)1/23/1999 2:19:00 PM
From: Syncrude  Read Replies (1) of 552
 
Vargas;

Sorry about the poor quality of my cut and post via Carlson's site:

999-01-22 (provided courtesy of Canadian Corporate News.)
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Armada Gold Corporation - Erdmin Sale Update

TORONTO, ONTARIO--Armada Gold Corporation advises that it has commenced negotiations with High Plains Resources (HPR) to effect some amendments to its agreement with HPR to sell the rights to
Armada's 49 percent interest in the Erdmin copper cathode project
in Mongolia (the "HPR Agreement"). These amendments are driven by
commercial ramifications of the current low copper price.

During the current winter period, production at the Erdmin pilot plant (Phase I) has reduced in a similar percentage to the fall in production which occurred during last year's winter. The
reduction has been caused by severe conditions resulting in a
reduction in bacterial activity in the copper waste dumps and a
consequent reduction in the amount of copper leached. With the
continuing low prevailing copper price combined with this reduced
production, Erdmin has recently been operating below break even
putting it in default of its Marubeni loan agreement and expects
there to be a shortfall in its required installment payment to
Marubeni Corporation under its repayment schedule for the debt
facility provided by that company for the construction of the
pilot SX/EW plant.

In anticipation of such a shortfall Armada has commenced negotiations with Marubeni. Although not directly liable, Armada and its Mongolian partner, Erdenet Concern Co. are joint
guarantors and unless otherwise agreed will have to jointly make
up to Marubeni the projected shortfall of approximately US$350,000.

Under the HPR Agreement this shortfall is in fact now the responsibility of that company. However, it is in all parties' best interests for Armada to resolve a deal between HPR and
Marubeni. Armada's negotiations with HPR propose that a portion
of the first US$500,000 payment due under the HPR Agreement be
applied to meet an agreed upon shortfall amount with Marubeni, as
well as some costs associated with the completion by Erdmin of a
supplementary budget and work program directed at lifting the
pilot plant production in the summer of this year.

Armada intends to issue a further release upon completion of negotiations next week providing complete details of the
anticipated changes to the agreement with HPR.

The Common shares of Armada Gold are listed on The Toronto Stock Exchange and The Alberta Stock Exchange under the symbol AAU.
U.S. S.E.C. Exemption:12g3-2(b) 82-3965.

-30-

FOR FURTHER INFORMATION PLEASE CONTACT:

Armada Gold Corporation
EJ Oosterhuis
Investor Relations
(416) 777-0001 or toll-free 1-800-517-1119

"Neither The Toronto Stock Exchange nor The Alberta Stock Exchange has either approved or disapproved the contents of this release"


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