Sterling Group Ventures, Inc. ("Sterling"), through its wholly owned subsidiary, has signed an agreement to develop Dangxiongcuo ("DXC") salt lake project at Naqu in Tibet of China. Pursuant to the Agreement with Beijing Mianping Salt Lake Research Institute ("Mianping"), the parties have agreed to set up a Cooperative Company, Tibet Saline Lake Mining High-Science & Technology Co. Ltd. (the "Cooperative") to develop DXC Salt Lake. The objective of the Cooperative is to use the funds provided by Sterling and the skills and technology provided by Mianping to produce lithium carbonate (Li2CO3) and borate from brine. Sterling is to own 65% and Mianping 35% of the Cooperative.
In July 8, 2008, Sterling has signed an agreement (the "Agreement") with Zhong Chuan International Mining Holding Co., Ltd. ("Zhong Chuan") of China to restructure the transactions contemplated under the earlier agreement (the "Initial Agreement") entered into between Sterling (through its subsidiary) and Mianping, to accelerate the development of the lithium and potash salt lake deposits in China, and to complete an equity financing including 100 million RMB yuan(US$14.5 million) registered capital for the joint venture and a private placement.
Zhong Chuan, a private company was founded by its current chairman, Mr. Sun Ximing. It has eighteen domestic and overseas direct subsidiaries exploring and developing precious, non ferrous and ferrous metals and energy resources. Zhong Chuan is now a leading private Chinese mining company expanding internationally.
Zhong Chuan has considerable experience and success in developing mines in China. It owns 4 large mines and will work with Sterling to develop lithium and potash projects in China. Under the terms of the Agreement, Zhong Chuan will, through a related private Hong Kong company, Monte Sea Holdings Ltd. ("Monte Sea"), acquire control of Sterling and focus on the development of lithium and potash projects in China, including DXC Salt Lake and other salt lakes which have been acquired by Zhong Chuan. The Key terms of the Agreement contemplates the following:
- Zhong Chuan will assume Mianping's rights and obligations under the Initial Agreement;
- Upon the coming into effect of the Agreement and the termination of the Initial Agreement, Zhong Chuan will cause Mianping to repay 6,000,000 RMB to Sterling (by way of Sterling's wholly owned subsidiary);
- Zhong Chuan will cause an operating company to be established in China which shall have a registered capital of 100,000,000 RMB. All interest in the Property under the Initial Agreement will be transferred to the operating company;
- The operating company will be converted into a joint venture company ("CJV") with Monte Sea acquiring up to a 65% interest in the CJV in consideration of the registered capital;
- Monte Sea shareholders will subscribe for 5,000,000 units to be issued by Sterling at $0.15 per unit. Each unit is comprised of one common share and one two-year warrant to purchase another common share at $0.16 per share. This subscription may be increased at the mutual discretion of Sterling and Monte Sea;
- Monte Sea shareholder will be issued up to 287,910,000 common shares in Sterling upon completion of certain milestones specified in the Agreement, such that the CJV shall have exploration and mining licenses permitting it to develop the Property. All such issuances shall be subject to regulatory approvals where required.
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Project Location
DXC salt lake view
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