Under the Definitive Agreement, the Company has agreed to issue to AXNG 1,000,000 common shares at the closing of the transaction. A further 1,000,000 common shares will be issued and C$500,000 paid by the Company to AXNG if and when the Company has completed financings for proceeds of at least C$2,000,000.
The Company also agreed to pay to AXNG additional milestone payments of up to an aggregate of C$3,300,000 in cash and 20,000,000 common shares, payable in stages if specific financing, resource and feasibility study and mine construction milestones are achieved. The Definitive Agreement provides for an alternate milestone payment structure payable only upon feasibility study and mine construction milestones if AXNG has not, within one year of the closing of the transaction and at no additional cost to the Company, expanded the property to include exclusive exploration and mining rights covering approximately 38.5 km2 of additional contiguous ground.
The closing of the transaction remains subject to various conditions including approval of the TSX Venture Exchange, the Company being satisfied with the results of its due diligence, the Company obtaining an independent National Instrument 43-101 compliant technical report on the property, required consents being obtained and certain authorisations being issued by the Lao PDR government.
Raj Chowdhry, President and CEO of AsiaBaseMetals, stated: "We are pleased to have entered into a definitive agreement for the acquisition by the Company of an indirect 90% interest in the Vientiane Potash Property in Laos. 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."
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.)
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 information" 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 will be able to obtain regulatory approval of the proposed transaction, that the various other conditions to the completion of the transaction will be satisfied, and that the Company will otherwise be 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, failure to satisfy conditions to the completion of the proposed transaction, many of which are not within the Company's control, 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
VANCOUVER, BRITISH COLUMBIA - AsiaBaseMetals Inc. ("AsiaBaseMetals" or the "Company") (TSX VENTURE:ABZ) is pleased to announce that the Company has entered into a definitive purchase and sale agreement (the "Definitive Agreement") with AXN Group LLC ("AXNG") for the acquisition by the Company of a 90% interest in a Laos limited company that will hold exclusive rights to explore and mine the Vientiane Potash Property, a 16.5 km2 potash exploration property located in the Huaxieng - Xaithany area of Vientiane province, Laos. The Definitive Agreement was entered into pursuant to a Letter of Intent announced by the Company on September 1, 2011 and amended on December 12, 2011.