Zone of Peace
Tibet Deal Excites South China Resources
Tue 09 Jan 2007
LONDON (SHARECAST) - South China Resources edged higher Tuesday after it said it has entered into a binding deal with Qinghia Fertiliser Company Ltd to buy a 53% interest in the Zhunuo copper project in Tibet.
The binding Exploration and Mining Right Cooperation and Sale Agreement will see QFC retain 2%, with Tibet Bureau of Geology and Mineral Resource Brigade 2 holding the rest.
"The Zhunuo project could have a significant impact on South China Resources and has the potential to elevate the company into significant producer status," said the AIM listed group.
"This project has the clear hallmarks of a world class porphyry copper project," added managing director Steve Leithead.
South China, QFC and Brigade 2 will form a cooperative joint venture company in China and the exploration license and associated rights will be transferred from Brigade 2 to the JV.
Under the Agreement, South China will be obliged to fund ongoing exploration work based on agreed budgets and provide technical management support and technology to the JV.
It will pay RMB 53m, or $8m, to QFC to be satisfied by the payment of RMB 30m within five days of the JV obtaining a business licence.
The balance will be due five days after the completion of the transfer of the exploration license and associated rights by Brigade 2 to the JV.
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