Increase in interest in Caijiaying Mine to 88.8% and extension of Joint Venture by 25 years to 2037
Griffin Mining Limited (“Griffin” or “the Company”) is delighted to announce that it has entered into an agreement to purchase the majority of the Zhangjiakou Caijiaying Lead Zinc Mining Company Limited's (the "ZJK Mining Company") interest in Hebei Hua Ao Mining Industry Company Limited ("Hua Ao"), the owner of the Caijiaying Zinc-Gold Mine and surrounding tenements, for Rmb 700 million (approx $110 million) in cash. When the transaction is completed, Griffin’s interest in Hua Ao will increase from 60% to 88.8% and the joint venture will operate under an extended 25 year term through to 2037. The ZJK Mining Company will retain an 11.2% interest in Hua Ao.
The purchase is conditional upon the approval of and registration by the relevant Chinese authorities. It is estimated that the approvals will take up to two months to complete. The purchase will be financed from undistributed retained dividends in Hua Ao, committed banking facilities in China and Griffin's existing cash resources.
Griffin’s Chairman, Mladen Ninkov, commented: “The acquisition of an overwhelming majority interest in the Caijiaying Mine and the extension of the joint venture to 2037 with full management control, has been the dream which management and shareholders have held since production first began at Caijiaying in 2005. It is a credit to the directors and management of the company and a testament to the harmonious relations Griffin has maintained with all levels of government, community, employees and citizens in China that this transaction has been able to be achieved. We look forward to the ensuing decades and the continuing expansion of resources and production at Caijiaying. I could not be more delighted for our shareholders."