Xanadu Mines, Noble Group finalize terms for strategic alliance in Mongolia

Xanadu Mines Ltd. has announced finalization of terms for a strategic alliance with Noble Group to explore and develop coking coal, iron ore and ferro alloy opportunities in Mongolia. Following execution of formal agreements, Xanadu and Noble will participate in the strategic alliance through a joint venture company with each party holding a 50% interest. The existing assets held by Xanadu will not form part of the present alliance. The initial focus of the joint venture will be the pursuit of a number of opportunities already identified to maximize the benefits of Xanadu’s and Noble’s respective country experiences and strengths.

The agreement includes a placement of ordinary shares to Noble of up to 9,688,367 shares, which will take Noble’s equity interest in Xanadu (through its subsidiary) to 9.9%. The agreement contains a right until 31 December 2014, for Noble to "top-up" its shareholding in Xanadu in the event that Xanadu issues new shares. The funds from the placement, together with a similar amount contributed to the joint venture by Noble, will be applied exclusively to the exploration and development of coal, iron ore and ferro alloy opportunities in Mongolia.

Commenting on the alliance, Xanadu’s Chairman Brian Thornton said, “The completion of formal agreements will enable the joint venture to advance and bring to fruition a number of opportunities that the companies have been evaluating in Mongolia. With the transfer of Noble’s exploration team to Xanadu to support the joint venture, our total personnel in Mongolia now number 24. The alliance, while focusing on coking coal, iron ore and ferro alloys, will also allow Xanadu to continue to advance its existing Galshar and Khar Tarvaga thermal coal projects and its copper gold assets in north west Mongolia and the south east Gobi.”
Source: Xanadu Mines
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