Following the completion of the Karchiga DFS the Company began the process of identifying companies and contractors to complete the detailed design work going forward into the start of construction. In addition the Company continues to identify potential off-takers for the copper concentrate internationally, including amongst others, the People's Republic of China ("China") and Kazakhstan. The Karchiga Project is favourably located approximately 220 km south east of the regional centre, Ust-Kamenogorsk, and approximately 40 km from the Chinese border to the east. The nearest copper mining operation in China at the Ashele VMS deposit, containing 1 million tonnes of copper, is located approximately 85 km east-southeast from the Karchiga Project.
TALAS COPPER-GOLD-MOLYBDENUM PROJECT, KYRGYZSTAN
Until its sale on July 23, 2012, the Company's material property in Kyrgyzstan was the Talas Project.
The licences in the Talas Project were held by Talas Copper Gold LLC ("TCG"), which became a wholly owned indirect subsidiary of Gold Fields following the completion of the Sale on July 23, 2012.
Prior to the completion of the Sale, the Company had been conducting exploration and development activities with respect to the Talas Project through its interest in the JV Company (as defined below), the direct holder of TCG.
Joint Venture with Gold Fields
Until the completion of the Sale, the Talas Project was subject to the joint venture agreement dated December 3, 2008, as amended on August 14, 2009, between the Company, the Gold Fields Group, Lero, Kami Associates Limited (the "JV Company") and TCG (the "JV Agreement").
Pursuant to the terms of the JV Agreement the Gold Fields Group had earned a 60% interest in the JV Company in January 2010, with the Company then retaining a 40% interest in the JV Company.
On July 23, 2012, the Company completed the Sale to the Gold Fields Group for $10 million cash. The Company was also refunded its aggregate contributions of $240,089 to the 2012 Talas Project exploration programme. Following the completion of the Sale, the Gold Fields Group now owns a 100% interest in the Talas Project and the Company's joint venture with Gold Fields in relation to the Talas Project was terminated.
In addition to acquiring Orsu's 40% interest in the Talas Project, the Gold Fields Group also agreed to the Subscription by subscribing for 25 million Units at a price of CAD$0.40 per Unit for gross proceeds of CAD$10 million. Each Unit is to consist of one Common Share and one half of one Warrant. Each Warrant will be exercisable for a period of three years from the date of issue to acquire one Common Share at a price of CAD$0.50. The gross proceeds of CAD$10 million cash are being held in escrow pending the Company's receipt of the Kazakh Formal Waiver or Gold Fields waiver of such condition. The Units will not be issued to the Gold Fields Group until such condition has been satisfied or waived by the Gold Fields Group. Upon completion of the Subscription, the Gold Fields Group will own 26,134,919 Common Shares and 12,500,000 Warrants. All Common Shares issued pursuant to the Subscription or any subsequent exercise of the Warrants (within 4 months of the Unit issuance date) will be subject to a hold restriction for 4 months after the date the Units are issued.
AKDJOL-TOKHTAZAN PROJECT, KYRGYZSTAN
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