I normally dislike posting releases to this site. I don't mind if others do, but I'd rather this be a forum for discussion, not dissemination of news.
However.....
Thursday, November 19, 1998 For Immediate Release
Release: Series 3 Release 107
Joint Venture Partner Agrees to Sell Interest in Bumbat Mine
Mongolia Gold Resources Ltd (the "Company") announces that it has been informed by its joint venture partner, Mongolyn Alt Corporation ("MAC") of their agreement to sell their entire interest in the Bumbat Mine to the Trade and Development Bank of Mongolia, (the "Bank") in satisfaction of their indebtedness to the bank of US$3.0 million. No other conditions have been disclosed. The Trade and Development Bank is a government-owned deposit-taking and lending institution and is one of the largest banks in Mongolia.
MAC notified the Company of their agreement with the Bank, and has requested that our right of first refusal be considered. Under the joint venture agreement, the Company has 60 days from the date of notification of the sale to match or better the terms of the transaction. No sale can be completed unless the buyer agrees to be bound by and signs the joint venture agreement.
The Bumbat Mine is a 300 tonne per day open pit gold mine located 200 km west of Ulaanbaatar in Mongolia. It has been shutdown since mid-January 1998 due to MAC's inability or unwillingness to provide their financial contributions. MAC had been seeking a buyer for its interests since this time. The Company was aware that at least two other parties had conducted preliminary due diligence studies on the Bumbat Mine, and that at least two other offers had been presented to MAC.
During the short commissioning period, the Bumbat Mine was able to confirm the reserve grade of the portion of the 118 pit that was mined. Dilution exceeded expectations, but steps had been taken to ameliorate this. The mill's ability to treat and recover gold from the ore at its rated capacity was confirmed. Total operating cost per tonne was also confirmed to be within the parameters defined in the feasibility study.
The Company is pleased that MAC has concluded an agreement to sell, and will be examining its options during the next few weeks. The Company has been in contact with the Bank, and will announce new developments as they occur.
On behalf of the Company
Dr. D.R. Webb
President
For More Information:
Investor Relations (604) 681-2877
Website - stockgroup.com
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