The Mundoro-JOGMEC land package, as amended, establishes a continuous exploration area in the Timok district which has proven mineral endowment with operations such as the Bor and Veliki Krevali mines as well as the Cukaru Peki deposit.
Mundoro Capital entered into an amendment agreement to option a fourth property, the Company’s 100% owned Borsko Jezero exploration license, to its partner Japan Oil, Gas and Metals National Corporation (“JOGMEC”) with whom Mundoro has an earn-in agreement.
On March 7, 2016 Mundoro announced it had granted to JOGMEC an earn-in option on three of Mundoro’s exploration licenses: Dubrava, Padina and Zeleznik (the “Timok North Projects”) located within the Timok Magmatic Complex in northeastern Serbia. This Amendment will now add a fourth property to the earn-in Agreement with revised terms.
Teo Dechev, CEO and President of Mundoro commented, “Mundoro and JOGMEC have been building a strategic partnership and bringing the Borsko Jezero exploration license into the partnership is a natural progression of the relationship given that Borsko Jezero is an extension of the Dubrava license already under option directly to the east. The Mundoro-JOGMEC land package, as amended, establishes a continuous exploration area in the Timok district which has proven mineral endowment with operations such as the Bor and Veliki Krevali mines as well as the Cukaru Peki deposit. JOGMEC has proven to be a good partner with the 2016 exploration program well under way on the Timok North Projects. We look forward to announcing steady news flow as results come in from the various fields programs underway.”
Pursuant to the Agreement and Amendment, Mundoro has granted to JOGMEC the following earn-in and option rights to the now four Timok North Projects: Borsko Jezero, Dubrava, Padina and Zeleznik. Stage One Earn-in: JOGMEC may earn a 51% interest in the Timok North Projects by making US$4 million (previously US$3 million) in expenditures by March 2019. JOGMEC is under a firm commitment to spend US$1 million of this amount by March 2017. Stage Two Earn-in: Following the Stage One Earn-in, JOGMEC has a right to acquire an additional 24% interest in the Timok North Projects, for a total of 75% interest, by funding the completion of a Feasibility Study by the eighth anniversary of the Agreement (March 2024).
On completing the Stage Two Earn-In, JOGMEC will have a right, exercisable for a period of 60 days, to purchase an additional 5% interest in the Timok North Projects from Mundoro, for a total of 80% interest. The purchase price for the 5% interest will be determined by an independent appraisal of fair market value. JOGMEC will be responsible for future expenditures on the project through to production if it completes Stage Two, including Mundoro’s share of capital expenditures. Mundoro’s portion of capital expenditures shall be repaid from 50% of the cash flow that Mundoro would otherwise be entitled to receive on a pro rata basis from the joint venture. If either party dilutes below 10%, their interest will convert into a 2% NSR of which up to 1% NSR will be re-purchasable for a total of US$4 million.
Mundoro will be the initial operator of the Timok North Projects. A management committee has been formed and is comprised of two representatives from each of Mundoro and JOGMEC.
