China Shen Zhou Subsidiary Signs Agreement To Acquire 60% Of Qianshi Resources And Meilan Mining In Guizhou Province
BEIJING, Feb. 8, 2012 /PRNewswire-Asia-FirstCall/ -- China Shen Zhou Mining & Resources, Inc. (" China Shen Zhou", or the "Company") (NYSE Amex: SHZ), a company engaged in the exploration, development, mining and processing of fluorite, zinc, lead, copper, and other nonferrous metals in China, today announced that its subsidiary, Xiangzhen Mining Ltd. ("Xiangzhen"), located in Inner Mongolia, has signed equity transfer agreements with the shareholders of Qianshi Resources Development Company Ltd. ("Qianshi Resources") and Meilan Mining Company Ltd. ("Meilan Mining"), based in the Tujia autonomous county of Tongren city, Guizhou Province, whereby Xiangzhen will acquire 60% ownership of each company's equity.
Qianshi Resources and Meilan Mining are primarily engaged in the mining, mineral processing, production and sales of fluorite and barite. Qianshi Resources has registered capital of RMB 1 million (US$ 157,480), and holds 100% of the mining rights to the Jingliang mine and the processing flotation plants in Huangtu town. Meilan Mining has registered capital of RMB 1.334 million (US$ 211,024), and holds 100% of the mining rights to the Fengshuiling mine of Banchang county. Prior to the agreement with Xiangzhen, both Qianshi Resources and Meilan Mining were wholly owned by two individual investors respectively.
According to the terms of the agreement, Xiangzhen will use 337,457 of China Shen Zhou's common shares, which is equivalent to RMB 6 million (approximately US$94,482, assuming a price of US$2.80 per share and an exchange rate of US$1= RMB 6.35) to acquire a 60% ownership stake in Qianshi Resources's equity, leaving the two original owners holding a 40% stake in Qianshi Resources's equity. Xiangzhen will use 506,186 of China Shen Zhou's common shares, which is equivalent to RMB 9 million (approximately US$1,417,323) to acquire a 60% ownership stake in Meilan Mining's equity, leaving the two original owners holding a 40% stake in Meilan Mining's equity.
The Jingliang mine's resources of fluorite and barite are estimated to be 100,000 metric tons and 200,000 metric tons, respectively. The annual ore processing capacity of the fluorite floatation plant of Qianshi Resources in Huangtu town is estimated to be 60,000 metric tons per year, which is expected to increase to 100,000 metric tons per year once a technology upgrade is completed. Fengshuiling mine's resources of fluorite and barite are estimated to be 400,000 metric tons and 600,000 metric tons, respectively. All estimated reserves require further verification.
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