TORONTO, May 14, 2018 (GLOBE NEWSWIRE) -- Asian Mineral Resources Limited (“AMR” or the “Company”) (ASN.V) is pleased to announce that it has entered into an agreement (the “Sale Agreement”) to divest its 90% ownership interest in the Ban Phuc Nickel Mine in Vietnam to Ta Khoa Mining Limited, a company established by its longstanding in-country senior manager, Stephen Ennor. Completion of the Sale Agreement is subject to AMR shareholders’ approval and certain customary conditions of closing, including approval of the TSX Venture Exchange.
Duncan T. Blount, President and CEO of AMR stated:
“As previously announced on April 24, 2018, the focus of our strategic review has been the sale of all of our assets comprising the Vietnam operation and we are pleased to have executed this divestment. Stephen Ennor is a highly experienced mining professional who has served in AMR’s senior leadership team based in Vietnam for over 10 years. He has significant experience operating in the mining sector in Vietnam and has vast knowledge of our Vietnamese assets. This transaction will allow AMR to achieve an orderly and clean exit from Vietnam and move forward to focus on exploring new investment opportunities in resource based companies or other potential strategic options.”
Terms of Sale Agreement
Under the terms of the Sale Agreement, the consideration for the sale is the assumption of existing trade payables, tax and other creditor liabilities of AMR’s subsidiary, Ban Phuc Nickel Mines LLC (“BPNM”), totalling over US$3,500,000. Further, AMR will retain the rights to receive 50% of any sale proceeds in excess of US$2,000,000 from the sale of the Vietnamese assets completed less than 6 months after closing of the Sale Agreement, and 25% of any sale proceeds in excess of US$2,000,000 from the sale of the Vietnamese assets completed between 6 and 18 months after closing of the Sale Agreement (the “Sale Proceeds”). The transaction will be put to AMR shareholders for approval at a meeting to be held in July 2018.
Financial Support from Pala Investments
In addition to the recent loans announced on April 16 and 24, 2018 totalling a principal amount of US$560,000 advanced by Pala Investments Limited (“Pala”) to AMR to assist AMR with funding working capital requirements and redundancy payments to the employees of BPNM, Pala will advance a further loan to AMR of up to a principal amount of US$70,000 to cover certain transaction costs and working capital requirements of BPNM for the period up to the closing of the Sale Agreement. The new loan carries the same interest rate of 5% per annum, and AMR and Pala have agreed that all such outstanding loans from Pala shall have a fixed maturity date of March 31, 2019 subject to earlier repayment out of the receipt by AMR of any Sale Proceeds. The loans from Pala are unsecured and AMR continues to have the right at any time to repay some or all of the outstanding loans (without restriction or prepayment charges).
About AMR
AMR owns and operates a nickel mine with historical nickel sulphide production, and is exploring for additional high-grade nickel assets in Vietnam. AMR commenced commercial production from its 90%-owned Ban Phuc Nickel Mine in Vietnam in mid-2013. As of 30 September 2016, the Ban Phuc Nickel Mine has produced a total of c. 20,700 tonnes of nickel and c. 10,100 tonnes of copper contained in concentrate, plus a cobalt by-product since the beginning of its mine life. Mining and processing operations at Ban Phuc were suspended in September 2016 and operations were transitioned to a care and maintenance scenario. In addition to in and near-mine expansion projects, Ban Phuc provides a platform from which AMR can continue to focus on developing a new nickel camp within its 150km2 of concessions located throughout the highly-prolific Song Da rift zone, where AMR has a number of advanced-stage nickel exploration targets.
For further details on AMR, please refer to the technical report entitled “NI 43-101 Technical Report – Ban Phuc Nickel Project” dated February 15, 2013 and the technical report entitled “NI 43-101 Technical Report – Ta Khoa Concession’’ dated March 3, 2017, both available on SEDAR or the AMR website www.asianmineralres.com
Forward-Looking Statements
Statements made in this news release may be forward-looking and therefore subject to various risks and uncertainties. Such statements can typically be identified by terminology such as ‘‘may’’, ‘‘will’’, ‘‘could’’, ‘‘should’’, ‘‘expect’’, ‘‘plan’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘intend’’, ‘‘possible’’, ‘‘continue’’, “objective” or other similar expressions concerning matters that are not historical facts. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. AMR does not undertake to update any forward-looking statements; such statements speak only as at the date made.
Going Concern Risk
As described in AMR’s most recent Management Discussion & Analysis, the continuing operations of the Company are dependent upon its ability to continue to raise adequate financing, to commence profitable operations in the future, and repay its liabilities arising from normal business operations as they become due. There remains a significant risk that the Company is unable to find alternative sources of financing for on-going working capital requirements. These material uncertainties cast significant doubt upon the Company’s ability to continue as a going concern.
Failure to obtain sufficient financing could result in a delay or abandonment of the Ban Phuc Nickel Mine in Son La, Vietnam and could force the Company into reorganization, bankruptcy or insolvency proceedings. Additional financing may not be available when needed or, if available, the terms of such financing might not be favourable to the Company and might involve substantial dilution to existing shareholders. Failure to raise capital when needed would have a material adverse effect on the Company’s ability to pursue its business strategy, and accordingly could negatively impact the Company’s business, financial condition and results of operations.
For further information:
Paula Kember
Chief Financial Officer
Telephone: (416) 360-3412
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.