Grant of options re Andash di

RNS Number : 7349U

Aurum Mining PLC

30 June 2009

 



30 June 2009

AURUM MINING PLC

('Aurum' or 'the Company')

Granting of options to facilitate the disposal of the Andash asset and the ancillary mining fleet.

In line with its key stated objective to deliver Shareholder value from the Company's Andash asset in the Kyrgyz Republic, the Aurum Board is delighted to announce that it has granted options to facilitate the disposal of both its 80% interest in the Andash gold-copper mining project ('Andash') and its ancillary assets, consisting mainly of a mining and construction fleet. The options have been granted to ASX listed gold mining company, Kentor Gold Limited ('Kentor'). 

If the options are exercised, Aurum will realise US$10m from its 80% stake in the Andash project and a further US$5m for its share of the ancillary assets.

As a further component of the proposed deal, and once the initial options have been exercised, Aurum will acquire a 10% stake in the Andash project from its local partner for consideration of US$1.2m. The net effect of the deal, if all options are exercised, will therefore be that Aurum will receive US$13.8m in cash and it will retain a 10% stake in the Andash project. The shareholders in the project post the transaction would be Kentor with 80%, Aurum with 10% and Aurum's local partner with 10%.

The options are valid for an initial period of three months but can be extended for a further three months at the discretion and mutual agreement of both Kentor and Aurum.

The key terms of the option transactions are as follows:

• Kentor will pay Aurum US$100,000 for an initial exclusive 3 month option to purchase Aurum's 80% interest in the Andash Mining Company and separately Aurum's owned fleet of mining and construction equipment. 

• Aurum will not unreasonably withhold a 3 month extension to the options for a second payment of US$150,000. If a second three month option is granted, Kentor will also pay Aurum a $150,000 deposit which will be off-settable from the final purchase price once the deal is finalised.

• Kentor is permitted to exercise the option to acquire the Andash asset independently of the option to acquire the mining fleet but not vice versa

The Aurum Board is continually looking at ways to realise value from the Andash asset for its Shareholders and today's announcement is another significant step in that process.

The disposal of the Andash assets under the call option agreements would constitute a fundamental change in business (as defined by the AIM Rules) and will be subject to approval by Aurum's Shareholders should Kentor exercise their options. A circular to Shareholders seeking approval of the Andash disposal would also include details of the Company's investment strategy (as defined by the AIM Rules) following the disposal. 

Kentor Gold Limited (ASX Code: KGL) is an Australian-based company formed in 1998 as a specialist gold explorer. The Company was listed on the Australian Securities Exchange in March 2005 and has diversified into exploration for gold, geothermal energy and base metals in Central Asia. 

For further information: 

Aurum Mining plc	Tel: [phone]
Mark Jones, Chief Executive Officer Chris Eadie, Chief Financial Officer
Arbuthnot Securities	Tel: [phone]
John Prior

Notes to editors 

Aurum Mining, which joined the AIM market of the London Stock Exchange in May 2004, is a mining company focused on gold opportunities in the Former Soviet Union. Its principal asset is an exploration licence over the Andash gold and copper project in the Kyrgyz Republic. A mining licence for Andash Zone 1 was awarded by the Kyrgyz authorities in 2006. The feasibility study compiled by Wardell Armstrong International, also in 2006, confirmed a measured and indicated resource base of 19.2 million tonnes at 1.1 grams per tonne of gold and 0.4% copper, which equates to 1.1 million ozs of gold and gold equivalent. The Andash project also includes Zone 2 and Zone 3 along with Tokhtonysay, Nakhodka and three other additional exploration areas.

 

END

 

 

DISUKURRKARNUUR