Northern Mining (ASX:NMI) has provided an update on the acquisition of a 49% stake in Northland Resources.
Northland is in the business of gold mining operations in China, specifically Xinjiang, an autonomous region in the northwest of the country, and Inner Mongolia.
Northern Mining had initially agreed to pay $2.5 million in cash and 158,333,333 shares at $0.03 each (total value of $4.75 million).
The terms have slightly changed as Northern Mining is only able to issue up to 140,766,239 shares under its 15% placement capacity, with the remaining 17,567,094 to be issued, pending shareholders’ approval.
Northern Mining said in order to have the certainty of the completion of the deal, the company has agreed with Northland to pay cash of $527,013 in lieu of issuing the shortfall shares after shareholders’ approval has been obtained in the upcoming AGM.
This value is derived from 17,567,094 shares at $0.03 each.
Northland is in the business of gold mining operations in Xinjiang Uygur and Inner Mongolia in China and intends to seek business investments and joint venture opportunities in gold and nickel mining projects.
Northland owns a gold concession situated in Northwest China's Xinjiang Uygur Autonomous Region, Xinyuan County in the Ili Valley.
The neighbouring tenements owned by a separate party have recently announced a large discovery of gold mine within the Narat-Hongliu River metallogenic belt which continues into Northland's concession.
Oulinda Group, a subsidiary of Northland, has spent the last two years and more than US$12 million to secure the gold concession.
Oulinda is expected to secure financing support from its parent company Northland so as to complete its final geological study before further submissions are made to the Xinjiang Geology and Mineral Resources Bureau in China.
A formal drilling and exploration program is also expected to be submitted for the Bureau’s approval as soon as funding is secured.