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Gold/Mining/Energy : Mongolia Gold Resources -- Ignore unavailable to you. Want to Upgrade?

To: Phil Jones who wrote (1900)	3/23/1998 10:20:00 PM
From: rdww	Read Replies (1) \| Respond to of 4066

promising my butt! this dispute is as old as Bumbat and should have been settled before production even started - now it's a convenient way of not restarting the mill. Nice move + suckered shrholder's along the way. Sign me up for Dave's next play. Partner intends to sell interest in the Bumbat Co Mongolia Gold Resources Ltd MGR Shares issued 24001373 1998-03-23 close $0.18 Monday Mar 23 1998 Dr D.R. Webb reports The company has been informed by its partner, Mongolyn Alt Corp, a private Mongolian company, of its intent to sell its 51% interest in the Bumbat Co. The Bumbat Co is the joint operating company responsible for the ownership and operations of the Bumbat property, Zaamar district, Mongolia. The company and MAC have been negotiating a resolution to the company's excess contributions (totalling more than US$918,000) to the Bumbat Co since May 1997 (see news in Stockwatch April 15 1997). Negotiations have encompassed many issues, but have focused on a dilution clause, and on an alternative penalty clause for non-contribution. A proposed resolution was reached in June 1997 whereby the company would make a one time concession to give preference to the penalty clause and accept cash compensation plus interest in lieu of an increased equity stake. This resolution required among other issues, a complete rewrite of the operating agreement by a mutually acceptable legal firm. A draft in English of this agreement was received by MAC and the company in September 1997. In January 1998 the company and MAC met with the management of Bumbat Co and reviewed the 1997 results and plan and budget for 1998. It became apparent that MAC was unwilling or unable to make payments according to the penalty clause, and was unwilling to forfeit equity in Bumbat according to the dilution clause. It is also unwilling or unable to provide its required financing to Bumbat Co. In late February 1998, MAC notified the company of its intent to sell. The company sought clarification of this statement, and MAC provided the company with a general provision contract dated February 24 that discloses only general terms of a sale, without disclosing details necessary to complete the transaction. The company has engaged legal counsel in Mongolia, and is seeking clarification of this GPC document. The company intends to review the complete documentation according to its first right of refusal as defined in the Bumbat agreement. Until these issues are resolved, the company will not increase its over-contribution to Bumbat and thus continuing operations at Bumbat are dependant upon a speedy resolution of these issues or financing provided by sources other than the company. The company's interests are secured by Mongolian and international law. The company's financing for the project was completed by equity sales, and has no outstanding debt on the project. Debt financing by the partners secured by the Bumbat is specifically prohibited without unanimous consent of the joint venture participants. (c) Copyright 1997 Canjex Publishing Ltd. canada-stockwatch.com