I saw it - Npot sure why they would do this - They dont seem to be getting much in return.
here it is
TVI to sell 25% interest in Rapu Rapu
TVI Pacific Inc TVI
Shares issued 108,353,351 Jan 11 close $0.055
Wed 12 Jan 2000 News Release
Mr. Cyrus Ameli reports
TVI Pacific has signed an agreement to sell all of the company's
25-per-cent interest in the Rapu Rapu project, Philippines, to Lafayette
Mining NL. TVI will retain a 2.5-per-cent net smelter return royalty in the
project.
Lafayette has been exploring and developing the project under a joint
venture agreement entered into in October, 1998, under which it was earning
a 63.75-per-cent interest by spending $3-million (U.S.) (on the project
over a period of four years.
In exchange for its interest in the project, TVI will receive an immediate
cash payment from Lafayette of $500,000 (U.S.), 3.3 million of that
company's common shares, which are currently trading at 17 Australian cents
(value of approximately $538,000), and 3.3 million share purchase options
exercisable at 20 Australian cents at any time over a four-year period.
Lafayette will have the option to purchase the 2.5-per-cent net smelter
return under certain conditions. The common shares will be free-trading, as
will those received upon exercise of the share purchase options.
Lafayette has recently completed a positive preliminary feasibility study
for a mine at Rapu Rapu, and has obtained an equity financing package of
approximately $3.5-million (U.S.) from Lion Selection Group Limited
(Australia), and underwriting support from Investa AG (Switzerland) for
further financing of approximately $1.1-million (U.S.). Lafayette has also
accepted an offer "in-principle" from Standard Bank Limited (U.K.) to
provide a project finance facility of up to $35-million (U.S.) to cover the
capital cost of the project plus working capital as indicated by the
preliminary feasibility study. Lafayette has also obtained a corporate loan
facility of $3-million (U.S.) for current working capital purposes and is
now proceeding with a bankable feasibility study in addition to conducting
an aggressive exploration program to increase the size of the known
deposit.
"We are very pleased with the deal that we have arranged with Lafayette,"
said Clifford M. James, president, chief executive officer and chairman of
the board of TVI. "The sale of our interest in Rapu Rapu allows TVI to
realize significant value from the project immediately, without having to
make further cash contributions to development and exploration work when
Lafayette completes its earn-in on the project (which was expected
shortly). It also reduces our exposure to any risk involved in the
project's development, allowing us to indirectly participate in future
earnings with proceeds from the retained net smelter return royalty and the
potential increase in value of Lafayette's shares. The proceeds of this
sale will be used for a near-term expansion of TVI's exploration
activities, advancing the development of Canatuan and for general working
capital purposes."
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