China Nonferrous Gold Consultancy Contract for the Construction of Processing Plant, Smelting Plant and Ancillary Facilities

 
TIDMCNG 
 
 

13September 2018

China Nonferrous Gold Limited

("CNG" or the "Company")

Consultancy Contract for the Construction of Processing Plant, Smelting Plant and Ancillary Facilities

China Nonferrous Gold Limited ?????????? (AIM: CNG), the mineral exploration and mining company currently mining the Pakrut gold project in the Republic of Tajikistan, is pleased to announce that the Company has authorised its subsidiary, Kryso Resources Limited, to enter into a new supplementary consultancy contract for the construction of processing plant, smelting plant and ancillary facilities with China 15th Metallurgical Construction Group Co., Ltd ("15MCC"), the former contractor of the construction project. China Nonferrous Metals International Mining Co., Ltd ("CNMIM") will no longer act as the agent for the Company regarding the contract.

As described in the "Award of Consultancy Contracts" announcement on 2 September 2014, CNMIM was authorised, while acting as agent for the Company, to enter into two consultancy contracts for the Company, one of which was for the construction of processing plant, smelting plant and ancillary facilities. It is no longer necessary for CNMIM to act as agent for CNG as Kryso Resources Limited is familiar with the contract and this simplification is expected to create cost and contract performance efficiencies.

A supplementary consultancy contract between Kryso Resources Limited and 15MCC has been entered into as the labour cost of the drainage work has significantly reduced (from 289 RMB/day to 135 RMB/day for each individual) and the overall unit price of backfill station work has decreased by 5% compared with the original contract. Thus, a supplementary contact has been signed, updated with these latest reduced prices for the construction work.

The estimated total target construction cost and consultancy fee under the new contract is broadly consistent with the original position announced on 2 September 2014.

Related Party Transaction

As 15MCC is an associate of CNMIM, a substantial shareholder in the Company and pursuant to AIM Rule 13, the entry into the supplementary consultancy contract is deemed to be a related party transaction. The Company's board of directors (excluding Wu Xiang, Yu Lixian and Zhang Hao, who are appointees of CNMIM) consider, having consulted with CNG's Nominated Adviser, Investec Bank plc, that the terms of the supplementary consultancy contract are fair and reasonable insofar as the shareholders of CNG are concerned.

For further information please visit the Company's website (www.cnfgold.com) or contact:

China Nonferrous Gold Limited

Yu Lixian, Managing Director

Tel: [phone]

Investec Bank Plc

Jeremy Ellis, Alexander Ruffman

Tel: [phone]

Blytheweigh

Tim Blythe, Camilla Horsfall

Tel: [phone]

View source version on businesswire.com: https://www.businesswire.com/news/home/20180913005401/en/

 
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(END) Dow Jones Newswires

September 13, 2018 05:25 ET (09:25 GMT)