Qiao Xing Universal (XING) Signs Letter of Intent to Acquire Marble Mine Company
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Qiao Xing Universal Resources, Inc. (NASDAQ: XING) today announced that it has signed a letter of intent ("LOI") to acquire a 100% equity interest in a company that owns an open-pit marble mine located in Guzhang County, Hunan province, China, from an independent third party.
According to the geological technical report, the Mine covers an area of approximately 0.43 square kilometers and has approximately 60.82 million cubic meters of measured and indicated marble resources (331 + 332 according to Chinese standards). This marble reserve is of a high-grade, black wood-grain type, whose supply is relatively limited in the Chinese market. At present, commercial mining has yet to commence at the Mine.
Under the terms of the LOI, the cash consideration for the acquisition will be determined by a third-party appraisal of the equity value of the Target Company as of October 31, 2011. The Company will pay an upfront refundable deposit of RMB 400 million to the Vendor (the "Deposit") to secure an exclusivity period of 120 days in which to complete the proposed acquisition. To secure the Deposit, the Vendor will pledge 60% of its equity interests in the Target Company to XING. Upon completion of the proposed acquisition, the Deposit will be applied towards the cash consideration. If the proposed acquisition cannot be completed for any reason, the Vendor will refund the Deposit to XING. The completion of the proposed acquisition is subject to, amongst other things, the satisfactory completion of due diligence by the Company and the signing of a definitive sales and purchase agreement. There is no guarantee that, after completion of diligence, XING will proceed with the acquisition on the present terms or at all.
According to the geological technical report, the Mine covers an area of approximately 0.43 square kilometers and has approximately 60.82 million cubic meters of measured and indicated marble resources (331 + 332 according to Chinese standards). This marble reserve is of a high-grade, black wood-grain type, whose supply is relatively limited in the Chinese market. At present, commercial mining has yet to commence at the Mine.
Under the terms of the LOI, the cash consideration for the acquisition will be determined by a third-party appraisal of the equity value of the Target Company as of October 31, 2011. The Company will pay an upfront refundable deposit of RMB 400 million to the Vendor (the "Deposit") to secure an exclusivity period of 120 days in which to complete the proposed acquisition. To secure the Deposit, the Vendor will pledge 60% of its equity interests in the Target Company to XING. Upon completion of the proposed acquisition, the Deposit will be applied towards the cash consideration. If the proposed acquisition cannot be completed for any reason, the Vendor will refund the Deposit to XING. The completion of the proposed acquisition is subject to, amongst other things, the satisfactory completion of due diligence by the Company and the signing of a definitive sales and purchase agreement. There is no guarantee that, after completion of diligence, XING will proceed with the acquisition on the present terms or at all.
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