Xanadu to acquire copper-gold project in Mongolia for $14M
Xanadu Mines and its joint venture partner Mongol Metals have entered an agreement to acquire a 90% stake in the Kharmagtai copper-gold exploration project in Mongolia. The said project will be purchased from Turquoise Hill Resources for $14 million, according to Proactive Investors.
Noble Group will be funding the deal with a three-year loan agreement worth $4 million, plus equity in Mongol Metals worth $4 million from Xanadu as initial consideration. The transaction is subject to approval by the shareholders of Xanadu, the report detailed.
Under the terms of the said deal, Mongol will shell out $4 million as initial consideration, plus $10 million in deferred consideration to be paid over 18 months, the report added.
Xanadu has pledged to spend around $900,000 until completion in order to earn a circa 18% interest in its joint venture company. The firm has the right to gain a minimum of 85% of Mongol Metals by funding the costs of exploration and acquisition, the report explained.
In early January, Xanadu has acquired the Oyut Olaan project for a combination of $600,000 in cash and 5 million Xanadu shares, Proactive Investors reported.