Mandorin resumes trading
Mandorin Goldfields Inc MGD
Shares issued 28,273,547 Jul 7 close $0.04
Wed 29 Sept 99 News Release
Mr. Malcolm Stevens reports
Trading of the company's shares have resumed on the Vancouver Stock
Exchange, effective Sept. 29, 1999. A cease trade order was issued against
Mandorin by the British Columbia Securities Commission in early July as a
result of the company's inability to file, within the prescribed time
frame, its audited annual financial statements. The cease trade order was
immediately followed by the imposition of a halt trade order by the
Vancouver Stock Exchange. This unfortunate event occurred as a direct
consequence of the civil unrest in Indonesia and the resultant widespread
chaos, which led to the vandalism of the company's Jakarta office, and the
subsequent loss and destruction of corporate records. As a result,
Mandorin's auditors, PricewaterhouseCoopers, were unable to complete its
audit of the company's financial records in a timely manner. Discussions
with the British Columbia Securities Commission resulted in its recognition
that these circumstances were beyond the control of the company and its
board of directors, and the commission's subsequent acceptance for filing
of the audited annual financial statements. Quarterly reports for the
periods ended Dec. 31, 1998, March 31, 1999, and June 30, 1999, have also
been filed.
The company is also very pleased to announce that a letter of intent has
been signed with Independence Gold Mining Zimbabwe Private Limited
(Indepgold), a subsidiary of International Mining Major, Lonmin plc, of
London, England. This letter of intent will lead to the signing of a
definitive joint venture agreement on Mandorin's Zimbabwe assets, EPOs 1072
and 1080, known as the Mazowe and Tafuna Hills projects.
The terms of the letter of intent are as follows:
Mandorin will place its licences (EPOs 1072 and 1080) into a joint venture
company, which entity will then hold the assets of the joint venture.
Upon signing a joint venture agreement, Indepgold will commit to making a
cash payment to Mandorin of $100,000 (U.S.). This cash payment will be
divided into four tranches. The first $25,000 (U.S.) being payable upon
execution of the joint venture agreement. The other three equal tranches
being payable at six monthly intervals thereafter. The full payment of this
$100,000 (U.S.) will earn Indepgold a 10-per-cent interest in the joint
venture.
Indepgold has the right to earn a further 30-per-cent interest in the joint
venture by spending $600,000 (U.S.) on the joint venture within 36 months
of signing the joint venture agreement. This 30 per cent can be earned in
10-per-cent tranches, provided that each tranche is earned within 12
months. Indepgold will commit to spending $200,000 (U.S.) at the start of
each tranche.
Indepgold's interest will move to 51 per cent by spending a further
$200,000 (U.S.) within 12 months of completing a 40-per-cent earn in. On
completion of the 51-per-cent earn in, Indepgold will be able to increase
its interest to 76 per cent by spending $1.4-million (U.S.) on the joint
venture over a three-year period. This 25-per-cent interest will be earned
in five tranches of $280,000 (U.S.). Any one tranche must be earned within
12 months but the entire 25 per cent must be earned within 36 months. The
completion of each tranche will earn Indepgold a further 5-per-cent
interest in the joint venture.
Once Indepgold has acquired a 76-per-cent interest in the joint venture,
Mandorin will have the right to contribute pro rata to its interest in the
joint venture, toward any further investment considered necessary by the
joint venture management committee and thereby maintain its interest at 24
per cent.
If Mandorin elects not to contribute, then Indepgold may further dilute
Mandorin's interest in the joint venture to 10 per cent by taking one
project through to feasibility and by spending $1.568-million (U.S.) on
exploration, feasibility or development. Once Mandorin has elected not to
contribute, it will not subsequently be permitted to begin contributing
again until Indepgold has diluted its interest to 10 per cent. Mandorin may
protect its 10-per-cent interest either by contributing 10 per cent of any
further costs or by accepting a loan from Indepgold to cover such costs,
which will be repayable (with interest) from distributable profits.
Indepgold will be operator of the joint venture.
Management believes that this agreement with Indepgold endorses the
company's decision to focus its exploration activities in Zimbabwe, a
highly mineralized and largely underexplored region of Africa, while at the
same time, forming an alliance with a reputable international mining
company.
In the ensuing months, the board of directors of Mandorin will continue to
explore opportunities, which will enable the company to rebuild shareholder
value. In order to facilitate this rebuilding process, the company will, at
the earliest opportunity, undertake a financing to raise sufficient working
capital. In the interim, however, the company has received a commitment
from a non-arm's-length corporate entity, CanAustra Holdings Limited, to
continue to provide the company with financial support.
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