Kincora Copper (KCC.V) executed a term sheet and received a non-refundable option payment of US$1.5-million from Tumen Ail Coal LLC (TAC) providing it exclusivity to secure 100% of Kincora's Mongolian subsidiaries, the company said on Tuesday.
TAC is an arms-length group with assets and operations in Mongolia, stated the company.
The aggregate consideration for the transaction is US$10-million payable to Kincora, free and clear of any taxes, levies, or fees, but excluding certain contractual obligations of Kincora's, it said.
A final agreement is expected by July 1, when the next milestone payment of US$3.5-million is due to Kincora, added the company.
"Upon execution of the definitive agreement, TAC shall deposit the final staged payment of US$5-million into an escrow account for release upon registration of the changes in the shareholders of the Mongolian subsidiaries which is anticipated to occur before year-end," it added.
The company's shares were last seen up C$0.04 to C$0.94 on the TSX Venture Exchange.
Price: $0.94, Change: $+0.04, Percent Change: +4.44%