|By Marketwired .||
|July 30, 2014 12:31 AM EDT||
HONG KONG, CHINA -- (Marketwired) -- 07/30/14 -- SouthGobi Resources Ltd. (TSX: SGQ) (HKSE: 1878) ("SouthGobi" or the "Company") has been notified that Turquoise Hill Resources Ltd. ("Turquoise Hill") has entered into a share purchase agreement to sell a 29.95% stake in the Company to National United Resources Holdings Limited ("NUR"), a Hong Kong-based public company listed on the main board of the Stock Exchange of Hong Kong Limited ("SEHK").
Under the terms of the agreement, which was effected in accordance with and in reliance upon the "private agreement" exemption under the Canadian takeover bid regime, Turquoise Hill has agreed to sell 56,102,000 common shares that it owns in the capital of the Company to NUR at a price of CAD0.455 per common share, following which Turquoise Hill would continue to hold 48,705,155 shares of the Company, representing approximately a 26.00% stake in the Company. SouthGobi notes that under the proposed transaction, approximately CAD12.8 million in cash will be received by Turquoise Hill at closing and deferred consideration of approximately CAD12.8 million will be payable to Turquoise Hill one year after the closing of the transaction.
Closing is subject to certain closing conditions, including approval of both the SEHK as well as NUR's shareholders. Closing is expected to occur no later than November 30, 2014.
Upon closing of the transaction, the Company expects that two persons nominated by NUR will be appointed to the board of directors of the Company.
SouthGobi will continue to focus on its business and drive to deliver upon its 2014's objectives with the usual high priority on safety.
SouthGobi is listed on the Toronto and Hong Kong stock exchanges, in which Turquoise Hill Resources Ltd. ("Turquoise Hill"), also publicly listed in Toronto and New York, has a 56% shareholding. Turquoise Hill took management control of SouthGobi in September 2012 and made changes to the board and senior management. Rio Tinto has a majority shareholding in Turquoise Hill.
SouthGobi is focused on exploration and development of its metallurgical and thermal coal deposits in Mongolia's South Gobi Region. It has a 100% shareholding in SouthGobi Sands LLC, Mongolian registered company that holds the mining and exploration licenses in Mongolia and operates the flagship Ovoot Tolgoi coal mine. Ovoot Tolgoi produces and sells coal to customers in China.
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