And here is the release
ASIA MINERALS ISSUES A NOTICE OF INTENT TO TERMINATE THE
YINGEZHUANG GOLD MINING JOINT VENTURE IN CHINA
VANCOUVER, Jan. 15 /CNW/ - Asia Minerals Corp.
Trading Symbol: ASE - AMP
Asia Minerals Corp. (the ''Company'') reports that a Notice of Intent to
Terminate the Yingezhuang gold mining joint venture in Zhaoyuan City,
Shandong, China was issued by the Company to the Zhaoyuan Gold Industrial
Group Corporation (''Zhaoyuan'') on 12 January 1998.
Yingezhuang is the first Sino-Foreign gold mining joint venture to obtain
full approval from the State Planning Commission and the Ministry of Foreign
Trade and Economic Cooperation. A Business License was issued to the joint
venture in October 1997. The joint venture contract requires the Company and
Zhaoyuan to each invest US$36 million over three years to earn a 50% interest
in the joint venture. The Company and Zhaoyuan planned to expand annual gold
production at the Yingezhuang mine from 15,000 to 91,000 ounces.
The Company prepared a mine expansion feasibility study during the period
June 1996 to November 1997 at a cost of US$1.5 million. The feasibility
report, containing a technically and economically viable expansion plan, was
submitted to Zhaoyuan in November 1997.
The joint venture contract sets out, amongst other things, certain
general principles for the operation of the joint venture and certain
performance requirements of the Company and Zhaoyuan. Since October 1997,
Zhaoyuan has breached numerous principles and provisions of the joint venture
contract. As a result of these breaches, the Company has concluded that the
expansion of the Yingezhuang mine would not be commercially viable for
technical, economic and management reasons.
Examples of non-compliance by Zhaoyuan with the terms and conditions of
the joint venture contract include:
1. Zhaoyuan rejects the authority of the joint venture Board of
Directors to determine the operating gold grade of the mine, insisting that
both ore reserve and production grades are set and approved by the State
Planning Commission;
2. Zhaoyuan has unilaterally entered into agreements with respect to
the expansion of the mine that are directly in conflict with the feasibility
study, such that significant additional capital costs will be incurred and the
engineering design will not meet international industry standards;
3. Zhaoyuan has materially increased the existing debt of the
Yingezhuang mine;
In addition, the joint venture has to date been unable to secure a mining
license or preferential tax policies that were offered prior to the issuance
of the Business License.
The Company has attempted by every means at its disposal to resolve the
differences with Zhaoyuan. A joint venture Board of Directors meeting was
convened in Zhaoyuan on 8 January in order to discuss, amongst other issues,
the defaults by Zhaoyuan. However, the Zhaoyuan Directors did not attend this
meeting and the issues were not resolved. Consequently, the Company has, in
accordance with the terms of the joint venture contract, issued on 12 January
1998 a Notice of Intent to Terminate the Yingezhuang joint venture.
The joint venture contract requires, upon issuance of the Notice of
Intent to Terminate, the Company and Zhaoyuan to commence negotiations within
30 days for the sole purpose of resolving the reasons for the notification of
termination. An application will be submitted to the Ministry of Foreign
Trade and Economic Cooperation to legally terminate the joint venture if the
negotiations have not been successfully concluded prior to 13 March 1998.
The Company is considering its legal options in the event that such a
termination occurs.
Dated at Vancouver, British Columbia the 15th day of January 1998.
ON BEHALF OF THE BOARD OF DIRECTORS OF ASIA MINERALS CORP.
''Signed''
David C. Owens
President
The Alberta Stock exchange has neither approved nor disapproved the
information contained herein.
Certain statements in this News Release constitute ''forward-looking
statement'' within the meaning of the Private Securities Litigation's Reform
Act of 1995. Such forward-looking statements involve risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of the Company to be materially different from any future results, performance
of achievements expressed or implied by such forward-looking statements. |
