May/June 2013 - The ASIA Miner

Mongolia
Erdene and Teck align for Trans Altay exploration
ERDENE Resource Development has formed
a strategic alliance with Teck Resources to
enable further exploration of its mineral tenements
in the Trans Altay region of southwest
Mongolia. The Khuvyn Khar copper porphyry
prospect will be the initial focus of the program,
along with a number of targets across
the Trans Altay region. Erdene’s Altan Nar
Gold Project and Zuun Mod Molybdenum-
Copper deposit are excluded from the deal.
“Teck is an exceptional partner for our metals
exploration in Mongolia and we are extremely
pleased for the opportunity to be
working together,” says Erdene’s chief executive
officer Peter Akerley. “In this unique period
for the junior mining industry our goal
was to secure a partnership that maintained
the tremendous upside of our regional copper
porphyry exploration. We expect Erdene
and its shareholders will benefit from Teck’s
technical expertise and substantial financial
strength, which will support and complement
our extensive in-country experience.”
Under the terms of the agreement, Teck
will subscribe for up to $3 million of Erdene
shares by way of a non-brokered private
placement. The initial tranche will be for 5
million shares for aggregate proceeds of $1
million. Erdene will commit 85% of the proceeds
from each tranche of the placement
to exploration work to be directed by a
technical committee, with the remaining
15% for general purposes.
Teck has the option to acquire additional
shares of Erdene until it has invested $3 million
or acquired through subscriptions 19.9%
of the outstanding shares of Erdene, whichever
occurs first. Teck will also have the option
to acquire up to a 75% interest in designated
projects by funding exploration expenditures
of up to $10 million on the Khuvyn Khar project
and up to $5 million on each of the other
existing or acquired projects within the Trans
Altay project area.
This new alliance comes as Erdene discontinues
its agreement with Xstrata Coal, which
was entered into in 2006. The two parties
have mutually agreed to discontinue the
‘Mongolia Alliance’ under which Erdene was
able to conduct coal-focused, regional scale
geological mapping programs across the
country. This field work resulted in the creation
of one of the most comprehensive coal
databases in Mongolia.
Denison continues GSJV restructure efforts
DENISON Mines is continuing its work to restructure
the Gurvan Saihan Joint Venture
(GSJV) to meet the requirements of the Mongolian
Nuclear Energy Law. Denison owns
85% of the JV which holds a number of insitu
uranium recovery projects in the South
Gobi region.
The GSJV was formed in early 1994 and
holds four exploration licences comprising
more than 685,632 hectares. Denison is managing
director of the JV and the other participant
is the Mongolian government, which
holds 15%. In March 2012, Denison acquired
the 15% interest in the GSJV held by Geologorazvedka,
a Russian entity, in exchange for
cash consideration of Can$742,000 and the
release of Geologorazvedka’s share of unfunded
joint venture obligations.
Under the Nuclear Energy Law of Mongolia,
the Mongolian participant in the GSJV is entitled
to hold a 34% to 51% interest, depending
on the amount of historic exploration
that was funded by the Government of Mongolia,
to be acquired at no cost to the Mongolian
participant. This interest would be held
by Mon-Atom LLC, the Mongolian stateowned
uranium company.
Denison and Mon-Atom are proceeding with
restructuring the GSJV to meet the requirements
of the Nuclear Energy law, pending receipt
of mining licences and government
reviews and authorizations. The final restructuring
of the GSJV, which was signed before the
new law, is expected to result in the company
having its interest reduced to 66%. Discussions
are ongoing and the timing for completion of
the restructuring is uncertain.
In 2009, the GSJV had its licences renewed
for three years and its resource report formally
accepted by the Mongolian government.
It was the first uranium resource
estimate accepted by the government and is
the first stage in receipt of a mining licence.
Mining licence applications for the four licence
areas were submitted in 2011.
In 2013, Denison’s Mongolian work program
is estimated to cost US$1.7 million and
the focus is on ongoing restructuring efforts
and the work necessary to obtain mining licences.
During the last quarter of 2012 exploration
expenditures on the GSJV properties
totalled Can$25,000 and for 2012 the total
was $3.156 million, compared to $200,000
and $3.971 million for the three months and
year ended December 31, 2011. A 29,700
metre drill program was completed on the Urt
Tsav and Ulziit properties in 2012 with the drilling
on Ulziit approximately doubling the defined
extent of the mineralized system.
The uranium prospects held by the Gurvan Saihan Joint Venture, of which Denison Mines currently holds 85%.
46 | ASIA Miner | May/June 2013