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Mundoro Capital Announces Earn-In Agreement with Vale in Serbia

Mining News - Published on Thu, 10 Oct 2019

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Mundoro Capital Inc announced it has entered into an earn-in agreement with Vale Canada Limited, in which Mundoro has granted to Vale an option to earn-in to four of Mundoro’s exploration licenses: Sumrakovac, Osnic, Dubrava and Padina located within the Timok Magmatic Complex in Serbia. Timok is one of the most prolific metallogenic domains in the Tethyan Belt. Timok hosts the Cukaru-Peki deposit and the producing mines: the Bor copper porphyry underground mine and the Veliki Krivelj copper-gold porphyry open-pit mine. Mr Teo Dechev CEO and President of Mundoro said that Mundoro is pleased to welcome Vale as our latest partner in Serbia, which reflects the prospectivity of Mundoro’s land package within the Timok region and demonstrates the growing interest in this region.

Terms Overview
Pursuant to the Agreement, Mundoro has granted to Vale an option to earn, over two primary phases, up to a 75% interest in the Vale-Mundoro Projects by sole funding expenditures of up to USD 45 million as follows:

Phase One:
Vale has the right to earn a 51% interest in the Vale-Mundoro Projects by sole-funding USD 5 million in expenditures over 3 years from satisfaction of the due diligence condition.
Mundoro will be the operator of the Vale-Mundoro Projects in Phase One.

Phase Two:
Following Phase One, Vale has the right, exercisable within 60 days, to elect to enter Phase Two, whereupon it can earn an additional 24% interest in the Vale-Mundoro Projects, for a total 75% interest, by sole-funding an additional USD 40 million in expenditures by the fifth anniversary of the election date.
If Vale (a) elects not to enter Phase Two, or (b) does not satisfy the Phase Two Option, then Vale will pay to Mundoro an annual fee of USD 150,000. Annual Payments cease upon commencement of commercial production. All Annual Payments will be credited against future payment obligations under the NSR.

Additional Terms:
The parties have agreed to establish a new Serbian corporation as the legal vehicle representing the earn-in/joint venture and to hold the relevant licenses and permits; the earn-in period will commence once all relevant organizational matters and transfers relating to the new corporation have been completed. On completing the Phase Two, Vale will have a right, exercisable for a period of 60 days, to purchase an additional 5% interest in the Vale-Mundoro Projects from Mundoro, for a total of 80% interest. The purchase price for the 5% interest will be based on a calculation of the fair market value as determined by an independent appraisal.
If Mundoro’s interest in the joint venture is reduced below 10% through dilution, Mundoro’s interest will be converted to a 2% Net Smelter Returns Royalty subject to Vale’s right to reduce the NSR to a 1% NSR by making a fixed price payment to Mundoro.

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Posted By : Rabi Wangkhem on Thu, 10 Oct 2019
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