Mindoro Resources completes Philippines sale to Red Mountain Mining
Wednesday, October 31, 2012 by Bevis Yeo
Mindoro Resources (ASX: MDO) has completed the A$10 million sale of its Batangas and Tapian San Francisco gold and copper-gold assets in the Philippines to Red Mountain Mining (ASX: RMX).
Red Mountain has issued Mindoro with 100 million fully paid ordinary shares worth a total of A$10 million to be held in escrow for 12 months along with 50 million Performance shares as consideration for the sale.
Mindoro now holds a 55.8% interest in Red Mountain on an undiluted basis.
The Performance shares would convert to full voting shares upon Red Mountain upgrading the Indicated Resource at Batangas to 600,000 ounces of gold and completing a scoping study that demonstrates a viable gold mining project based on more than 50% of the Indicated Resource converting to Mineral Reserve or equivalent by the 31 October 2013.
The Performance Shares, if converted, will be subject to a further voluntary escrow of up to 12 months.
Mindoro’s ongoing drilling program at Batangas continues to test high-grade gold targets at Archangel and high-grade targets are being defined at Lobo for drilling from early next year.
This program has been funded via a loan facility of up to A$1 million from Red Mountain.
The loan is now an intercompany loan between Red Mountain and it’s now wholly owned subsidiary Red Mountain Mining (Singapore) Pte Ltd that holds the interests in the Philippines subsidiaries and assets.
Mindoro’s president and chief executive officer, Jon Dugdale, has joined Red Mountain’s Board as an executive director while remaining President and CEO of Mindoro, and will become managing director of Red Mountain from early 2013 following his resignation as Mindoro’s president and CEO.
Red Mountain now holds a 100% interest in the Batangas Project and a 75% interest in the Tapian Project.
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