VANCOUVER, BRITISH COLUMBIA - AsiaBaseMetals Inc. ("AsiaBaseMetals" or the "Company") (TSX VENTURE:ABZ) is pleased to announce that the letter of intent announced on September 1, 2011, pursuant to which the Company agreed to terms for the acquisition of an indirect 90% interest in the Vientiane Potash Project, has been amended.
The Vientiane Potash Project currently consists of a 16.5 km2 potash exploration property located in the Huaxieng - Xaithany area of Vientiane province, Laos.
The amendments to the letter of intent provide for an alternate, deferred payment structure if the vendor has expanded the property with an additional 39 km2 of contiguous mineral rights for a total of 55 km2, within one year of the closing of the transaction and at no additional cost to the Company.
Under either payment structure, the maximum aggregate consideration payable by the Company to acquire the 90% interest in the Vientiane Potash Project, if all milestones are achieved, will be C$4,000,000 in cash payments and the issuance of 22,000,000 common shares. If the property is expanded by the vendor on the terms set out above, the consideration will be payable in stages on completion of specific financings, resource reports and feasibility studies and mine construction milestones. If the property is not expanded by the vendor, the consideration will be payable only if later-stage milestones related to the preparation of a feasibility study and mine construction is achieved. The maximum aggregate consideration has not been changed.
The transaction remains subject to, among other things, approval of the TSX Venture Exchange, required consents being obtained, the Company being satisfied with the results of its due diligence and the parties entering into a definitive agreement. The date by which the definitive agreement must be entered into has been extended by the amendments to the letter of intent.
A World Bank report, dated November, 2006, stated the following with respect to Laos: "Potash Rock Salt - As with gypsum, potash rock salt occurs in the evaporite of the Upper Cretaceous, and its distribution is confirmed to be large in Vientiane and Savannakhet provinces. Potash salt deposits in Vientiane and Savannakhet sedimentary basins are large in Laos. Thickness of the deposit in Savannakhet province was confirmed to be 70-85m at drill holes (DGM-INTERGEO, 2005). The resource of potash salt may be as high as 50 billion t." (Reference: The World Bank Trust Fund: #030670 - Final Report for Economic Geology FR-2, Sector Plan for Sustainable Development of the Mining Sector in the Lao PDR - Section 4.5.3, dated November 2006.)
Raj Chowdhry, President and CEO of AsiaBaseMetals, stated: "Having recently visited the Vientiane Potash Project in Laos earlier this year, I am pleased to state that this Potash project is a great opportunity for AsiaBaseMetals. Since Potash is one of the key components of fertilizer and with China, India and Indonesia representing three of the largest markets for agricultural products in the world, and located on the doorstep of Laos, Management believes that the Vientiane Potash Project represents a world class opportunity..."
ON BEHALF OF THE BOARD OF DIRECTORS
Raj Chowdhry, C.A., President & CEO
Cautionary Note Regarding Forward-Looking Statements: Certain disclosure in this release, including statements regarding the acquisition by the Company of an interest in the Vientiane Potash Project constitute "forward-looking statements" within the meaning of Canadian securities legislation. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that the Company believes are reasonable, including that the Company is able to obtain regulatory approval of the proposed acquisition and is otherwise able to complete the proposed acquisition. However, the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such uncertainties and risks include, among others, financing risks, delays in obtaining or inability to obtain required regulatory approvals and inability to complete the proposed acquisition. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on forward-looking statements. The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Philippe Van Nieuwenhuyse
604-628-1162 ext. 236