Kenadyr Mining (Holdings) Corp. (TSX-V: KEN; OTC- MKTS: KNDYF; FRA: KM0) (the Corporation or Kenadyr) is pleased to announce the Corporation has entered into a non-binding letter of intent (LOI) in connection with a proposed option and joint venture agreement with Gold Mountains Asset Management Limited or its designated affiliate (Gold Mountains) in respect of the Borubai Project (the Transaction).
Pursuant to the terms of the LOI, Kenadyr would grant to Gold Mountains an exclusive and sole option to acquire up to a 50% interest in the Borubai Project, (the Option). In order to exercise the Option, Gold Mountains would have right but not obligation to fund or directly incur not less than US$10,000,000 in exploration expenditures on the Borubai Project, subject to certain minimum expenditure obligations.
Upon the termination of the Option or Gold Mountains earning its 50% interest in the Borubai Project, Kenadyr and Gold Mountains would form a joint venture (the Joint Venture) with respect to the Borubai Project with Kenadyr acting as the operator of the Joint Venture. Exploration would focus on both the South and East Zones with Zijin Mining Group Ltd. (Zijin) providing access and logistics to enable drilling of the South Zone from underground using Zijins mining infrastructure. The East Zone would continue to be drilled from surface.
The LOI is non-binding and the execution of a binding definitive agreement for the Transaction is conditional upon, among other things: (i) no material adverse changes in the business affairs or financial condition of Kenadyr or the Borubai Project, (ii) approval of the boards of directors of each of Kenadyr and Gold Mountains and all required regulatory and shareholder approvals, as applicable, (iii) completion of satisfactory due diligence by Gold Mountains, (iv) adequate and complete representations and warranties provided by Kenadyr to Gold Mountains and by Gold Mountains to Kenadyr, and (v) negotiation of a definitive agreement in connection with the Transaction on terms acceptable to Gold Mountains and Kenadyr. There is no assurance that the Transaction will proceed as currently proposed or at all.
Brian Lueck, Kenadyr Chief Executive Officer, states, Kenadyrs drilling program to date demonstrates the mineralization comprising the orebody found at the TBL Mine, operated by Zijin, continues strongly in two directions along strike onto Kenadyrs Borubai License. The proposed joint venture with Zijin, as described today, will fund and facilitate further expansion and exploration drilling to completely delineate (to measured and indicated categories) both the South and East Zones on the Borubai License. This will allow us to fully unlock the value of these high-grade mineralized zones without further share equity dilution.
Drill holes in the South and East Zones were previously announced and have been highlighted by robust drill intersections including 40 meters at 6.17 g/t Au at the South Zone and 50 meters at 8.15 g/T Au at the East Zone.
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