SouthGobi Energy Resources
Ltd. (TSX VENTURE:SGQ) has sold its Metals Division to Ivanhoe Mines
Ltd. for US$3 million. The Metals Division consists of base and precious
metals properties in Mongolia.
The transaction will enable
SouthGobi Energy Resources to focus solely on its principal business
of coal production, development and exploration, according to company
officials.
As part of the sale agreement,
Ivanhoe Mines will allow SouthGobi to obtain advances from Ivanhoe to
a maximum of US$30 million. This credit arrangement will be operated
for one year with the possibility of being extended.
"We believe the sale of
the Metals Division represents excellent value to SouthGobi shareholders
and positions SouthGobi to continue its evolution as a stand-alone coal
mining company," said Peter Meredith, Chief Executive Officer of
SouthGobi Energy Resources Ltd.
However, the sale is subject
to approval from regulatory agencies, including the TSX Venture Exchange.
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