Mawson West Announces Agreement for Strategic Investment in Avalon Minerals
PERTH, AUSTRALIA and TORONTO, ONTARIO -- (Marketwire) -- 12/12/11 -- Mawson West Ltd. (TSX: MWE) ('Mawson' or the 'Company') is pleased to announce that it has entered into an agreement with Avalon Minerals Limited ('Avalon'), an Australian-based mineral exploration and development company listed on the ASX, to make a strategic investment in Avalon in the amount of A$3.88 million.
Mawson's investment in Avalon will be made by a placement of Avalon shares to Mawson to be completed in two tranches. The first tranche will consist of approximately 35.8 million shares to be issued to Mawson at a price of A$0.065 per share and will be completed within Avalon's existing 15% placement capacity under ASX listing rules. The second tranche will consist of approximately 23.8 million shares to be issued to Mawson at a price of A$0.065 per share, and is subject to approval by Avalon's shareholders at a meeting to be called following the completion of the first tranche of the placement. The issue price of A$0.065 per share represents the average trading price of Avalon's shares on the ASX over the previous 10 trading days prior to the calling of a trading halt by Avalon in connection with this matter. If the second tranche of the placement is approved by Avalon's shareholders, Mawson will hold 19.9% of Avalon's total issued capital after completion of the placement. Subject to ASX approval, Avalon will grant Mawson an anti-dilution right for a period of 2 years following the completion of the placement.
In addition to Mawson's financial investment, following completion of the first tranche of the placement, the parties will form a strategic alliance encompassing technical, business development, mining, metallurgy and marketing assistance by Mawsonto assist Avalon in advancing its projects. Avalon will also appoint a person nominated by Mawson as a director of Avalon.
The proceeds from Mawson's investment will be used to advance a bankable feasibility study ('BFS') on Avalon's Viscaria Project in Sweden and to explore Avalon's extensive regional tenement holding to the north of the Viscaria Project. The transaction is subject to due diligence by Mawson, which is expected to be completed by December 31, 2011.
Avalon has two project areas in Sweden - the Viscaria Project, located approximately 1,200km north of Stockholm, and the Adak Project located 400km south of Viscaria. Both projects were acquired from Phelps Dodge Exploration Sweden AB, a subsidiary of Freeport-McMoRan Exploration Corporation. The Viscaria Project is located adjacent to road, rail and electricity infrastructure and a short distance from the regional mining centre of Kiruna which has a population of 20,000 people.
The Kiruna region is regarded as an Iron Oxide Copper Gold (IOCG) province. Viscaria lies within 4km of LKAB's giant Kirunavaara Iron Ore Mine (Europe's largest iron ore mine and the world's second largest underground mine) and 80km north of Boliden's Aitik Copper Mine (Europe's largest open cut mine). Both deposits are considered to be world class with past production and current resources totalling over 2 billion tonnes and 1 billion tonnes respectively.
In May 2010, Avalon expanded its regional land holding to 650 square km and applied for four new tenements to the north of the Viscaria Project covering the Kurravarra, Karkejaure and Vittangijarvi targets, all of which are prospective for both copper and iron ore mineralisation.
In October 2010, Avalon commenced a substantial drilling and development program associated with the BFS on the Viscaria Project. Work on the BFS was recently suspended pending funding.
About Mawson West Ltd.
Mawson West Ltd. is an Australian-based copper producer, developer and explorer listed on the Toronto Stock Exchange. Mawson's focus is on the DRC, and its major asset is its 90% ownership of Anvil Mining Congo SARL, which is in the process of being renamed CMCC SARL ('CMCC'). The tenements held by CMCC, comprising 7,300 km2 of contiguous tenure, encompasses the Company's two main projects, the Dikulushi copper-silver mine and the Kapulo copper exploration and development project, as well as multiple exploration targets. The tenements held by CMCC are governed by the Dikulushi Mining Convention.
Mawson's principal objectives are to expand copper production at the Dikulushi mine, commence copper production at the Kapulo project and further explore the area governed by the Dikulushi Mining Convention to identify new targets. Mawson is also investigating other opportunities in the DRC and elsewhere which have the capacity to increase the Company's production in copper and other metals.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this press release.
Contacts:
Mawson West Ltd.
David Frances
President and Chief Executive Officer
61 8 9321-9669
61 8 9481-2394 (FAX)
dfrances@mawsonwest.com