Completion of increase Griffin’s interest in Hebei Hua Ao to 88.8% and completion of extension of Joint Venture term to 2037
Further to the announcement made by Griffin Mining Limited (“Griffin” or “the Company”) on 20th May 2012, Griffin is pleased to confirm completion of the agreement to purchase the majority of the Zhangjiakou Caijiaying Lead Zinc Mining Company Limited’s interest in Hebei Hua Ao Mining Industry Company Limited (“Hua Ao”), the owner of the Caijiaying Zinc-Gold Mine and surrounding tenements and the extension of the term of the Hua Ao joint venture to 2037.
Hua Ao has been granted a new business licence confirming Griffin’s 88.8% interest (through its wholly owned subsidiary China Zinc Ltd) and the extension of the joint venture through to 2037. This new arrangement is effective from the 21st May 2012. Griffin has paid Renminbi 700 million (US$110 million) in cash for the additional 28.8% (taking its interest from 60% to 88.8%) in Hua Ao and the 18 year extension of the joint venture term to 2037. The transfer of interests and extension of the joint venture term have now been registered with the appropriate authorities in China.
The purchase price has been financed from undistributed retained dividends in Hua Ao, banking facilities in China and Griffin’s existing cash resources.
Griffin’s Chairman, Mladen Ninkov, commented: “The recent announcements by Griffin in relation to its record 2011 financial results, record production, 32% increase in its JORC mineral resources, further exceptional exploration results and the continued movement to greater production at Caijiaying, fully justifies the decision to acquire a greater interest, and extend the term of, Griffin’s interest in the Caijiaying Mine and surrounding areas. As Griffin now progresses towards increasing production at Caijiaying, and with the hope of continuing favourable metals prices, the returns to Griffin and its shareholders should not only justify the price paid by the Company in this transaction, but exceed all expectations. We look forward to making this so.”