TSX-V-listed Candelaria Mining has terminated an agreement to buy a share in a 30-year copper/gold mining concession, in Georgia, after Aim-listed Empire Metals could not reach an agreement with its joint venture (JV) partner regarding a right of first refusal (ROFR).
Instead, Empire has sold its 50% in the Bolnisi project, held in GMC Investments, to its JV partner Caucasian Mining Group (CMG) for $3.3-million in cash.
Empire director Mike Struthers said in a statement that it had become evident that Empire’s JV in Georgia was not sustainable, despite sustained efforts from the company on different fronts for nearly three years.
“Although the company has appealed the decision by the Mining Agency to withdraw the majority of the original licence area there is little confidence in a successful outcome; and the sale and purchase agreement with Candelaria Mining cannot be executed because although CMG indicated their desire to exercise their ROFR, the company had no confidence in receiving the full consideration offered by Candelaria and this dispute can only be settled through lengthy and expensive arbitration,” Struthers, who is also Candelaria CEO, explained.
"The board has therefore concluded the best outcome for shareholders is to bring this chapter in the company's history to a close and to focus our resources and efforts elsewhere.”
Struthers said Empire’s efforts in Australia were already bearing fruit, and that the recent addition of the prospective Central Menzies project had further strengthened its presence in the gold sector in Western Australia.
“This injection of capital will ensure we are well funded for further exploration and project development works at our Eclipse gold project; for the initial work programme at our Central Menzies gold project; and, if justified, also funded to exercise the option at Central Menzies. I and the rest of the Board look forward to supporting our new MD Shaun Bunn as we develop real value through our assets in Australia."