Aspire Mining announces that execution of the concession agreement to build and operate the Erdenet to Ovoot railway in Northern Mongolia has been completed during signing ceremonies in Mongolia and China.
The ceremonies involved authorized representatives of the Government of Mongolia Investment Agency, Aspire Mining and its subsidiary Northern Railways LLC, China Railway 20 Bureau Group Corporation (CR20G) and China Railway First Survey & Design Institute (FSDI).
There have been no changes to the material terms of the concession agreement announced on August 12. Execution of the agreement follows three months of negotiations between the government and Northern Railways and was supported by a consortium consisting of Aspire, CR20G and FSDI.
The agreement provides for up to a five year construction timeframe followed by a 30 year operational period after which 100% of the base railway structure will be vested to the government.
Northern Railways now has 18 months to complete a number of conditions precedent required to commence construction of the project, which include completion of a bankable feasibility study (BFS), EPC contract, connection agreement to existing railway at Erdenet, financing, licences and permit necessary to construct and operate the project.
Northern Railways are exclusively engaged with CR20G and FSDI in relation to EPC contract negotiations and completion of the BFS respectively.
The first stage of the BFS is being completed and this was recently funded through the commitments of a US$600,000 loan to Northern Railways and US$200,000 placement in Aspire by Northern Railways’ advisor, Signum Resources Corporation.
The project spans 547km and forms part of Mongolia’s Rail Policy to provide rail access to its northern provinces through the extension of its existing rail network from Erdenet to the Russian-Mongolian border at Arts Suuri with a Russian connection planned to Kyzyl. The rail project will also benefit Aspire’s coal projects in Northern Mongolia, including Ovoot and Nuurstei.