Business
Xstrata Coal Acquires 9.8% Stake in Erdene
Xstrata Coal Acquires 9.8% Stake in Erdene.
About this update from Erdene Resource Development Corporation
[{"type":"text","content":"\n\n\n\n\nConference Call at 9:30 am ET Today\n\nHALIFAX, Feb. 14 /CNW/ - Erdene Gold Inc. (TSX:ERD) today announced it\nhas entered into an alliance agreement with Xstrata Coal Canada Limited\n(Xstrata Coal), a subsidiary of Xstrata plc (London Stock Exchange: XTA.L;\nZurich Stock Exchange: XTA.S), pursuant to which Xstrata Coal will subscribe\nfor 3,000,000 common shares of Erdene at $1.00/share resulting in Xstrata Coal\nowning a 9.8% equity interest in Erdene. The transaction is expected to close\nFebruary 16, 2006, subject receipt of all necessary regulatory approvals.\n\"This agreement with Xstrata Coal marks a pivotal point in the growth of\nErdene and is great news for our shareholders,\" said Peter Akerley, Erdene\nPresident and CEO. \"It will allow us to more aggressively test advanced\nprojects and continue with the creation of new opportunities with an initial\nfocus on coal. This partnership combines Erdene's strong pipeline of\nstrategically located, early stage properties in Mongolia with Xstrata's\nestablished relationships in Asia and ability to invest in and support world\nclass projects.\"\n\"With this investment in Erdene, Xstrata Coal gains exposure to a strong\ninventory of projects and a senior management team with established local\nknowledge of mineral resources in Mongolia. We look forward to working with\nErdene in helping advance their many exciting opportunities,\" said Xstrata\nCoal Chief Executive, Peter Coates.\n\nHighlights of the Alliance Agreement\n\nXstrata Coal will be granted a first option to enter into a joint venture\nand earn a 75% interest in any coal opportunity in Mongolia identified by\nErdene by funding all work through completion of a feasibility study. Should\nErdene elect to develop or pursue third party participation in any non-coal\nprojects or properties in Mongolia or elsewhere, Xstrata Coal will have a \n60-day right to review all supporting project information and, if it wishes to\nparticipate in the project, to negotiate the terms of its participation before\nErdene may make the opportunity available to another party or develop the\nproperty itself. Xstrata Coal will have the right to name a nominee to the\nBoard of Directors of Erdene. The rights granted to Xstrata Coal under the\nAlliance Agreement expire if Xstrata does not maintain a 5% equity position in\nErdene altho...