Following the termination of an agreement to dispose of its Nuurst Thermal Coal Project in Mongolia, Modun Resources has executed a conditional share sale agreement with two Mongolian nationals for the sale of all shares in its subsidiary Modun Resources LLC for proceeds of US$2.21 million.
Modun terminated the highly conditional sale agreement for Nuurst on its terms as a result of being unable to agree the terms of the formal sale agreement with the Mongolian purchaser. The parties had entered into the agreement in November 2014 but since then the parties have been unable to agree formal terms and Modun elected to terminate the transaction.
The company has been negotiating with other third parties in relation to the Nuurst project and last week advised that it had executed a new agreement for the sale of Modun Resources LLC, which owns the Nuurst coal assets.
The contract allows for payment of US$2.21 million of which US$100,000 is expected to be paid on exchange of contracts as a deposit. Completion is subject to and conditional upon shareholders of Modun approving the sale in a meeting of shareholders on July 30 and completion is to occur three business days after that date.
Modun says the transaction will also see the purchaser assume the risk of the potential Mongolian tax liability previously disclosed by Modun.