Rolf Gerritsen CEO of MetalNRG said “The decision announced by the government of the Republic of Kyrgyzstan is extremely disappointing, especially so after recent reassurances.
On a positive note, we have been able to eliminate our financial exposure to the Farm-In Agreement and will be talking to investors to get their input over the next few days.”
MetalNRG plc (NEX:MNRG) today announces that it has suspended the terms of the farm-in agreement with IMC (the “Farm-in Agreement”), announced on 27 March 2019 (the “March Announcement”) in relation to the Kamushanovskoye uranium deposit in Kyrgyzstan with a side letter dated 3 May 2019 (the “Side Letter”).
Capitalised terms used but not defined herein shall have the meanings given to such terms in the March Announcement.
On 2 May 2019, the parliament of the Kyrgyz Republic voted to ban all uranium exploration and mining in Kyrgyzstan indefinitely (the “Uranium Ban”). The government of Kyrgyzstan has been instructed to draft legislation to put the Uranium Ban into effect.
Pursuant to the Side Letter, the parties agree to suspend the Farm-In Agreement and all obligations of MetalNRG and IMC
thereunder for the duration of the Uranium Ban.
Under the Side Letter, MetalNRG and IMC agree that:
* IMC will waive the obligation of MetalNRG under the Farm-In Agreement to transfer to IMC the Initial Payment of $400,000, payable upon MetalNRG’s proposed Admission to the Official List.
* From the date hereof, and throughout the duration of the Uranium Ban, IMC will waive the obligation of MetalNRG under the Farm-In Agreement to make the Tranche Payments on each of the Agreed Dates.
* From the date hereof, and throughout the duration of the Uranium Ban, the Right of First Refusal (as defined in the Farm-In Agreement) shall continue to apply in favour of MetalNRG.
* If the Uranium Ban continues for a period of 12 months from the date hereof, MetalNRG shall have the right to terminate the Farm-In Agreement in its entirety by written notice to IMC and MetalNRG shall not be liable for any unpaid payments thereunder.
* If, within 12 months of the date hereof, either (i) the Uranium Ban ceases to be in force or (ii) the government of the Kyrgyz Republic allows IMC to progress work under its existing mining license for the sole purpose of processing waste (an exemption under the Uranium Ban), MetalNRG may, in its sole discretion, elect to re-enter the Farm-In Agreement, subject to the adjustment, if necessary, of the Agreed Dates in relation to the Tranche Payments and valuation of the Uranium Project.
IMC has continually held that its activities at the Uranium Project of ‘cleaning’ the peat and contained groundwater, which carries high levels of uranium (such uranium often contaminating the local water supplies), amount to those of processing waste.
IMC holds a mining licence with concomitant rights. The license was officially granted by the government of Kyrgyzstan in April 2019. MetalNRG’s current economic interest in the Uranium Project, as a result of its total investment to date of US$170,650, is 8.5%
Rolf Gerritsen CEO of MetalNRG said “The decision announced by the government of the Republic of Kyrgyzstan is extremely disappointing, especially so after recent reassurances. On a positive note, we have been able to eliminate our financial exposure to the Farm-In Agreement and will be talking to investors to get their input over the next few days.”
Rolf Gerritsen, CEO of MetalNRG, arranged for the release of this announcement.
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