China Resources

[Tackler]

Tiger Pacific to pursue joint venture at Erlian

2004-10-01 19:53 ET - News Release

Dr. Charlie Cheng reports

TIGER PACIFIC ANNOUNCES AN AGREEMENT FOR POTENTIAL JOINT EXPLORATION IN ERLIAN DISTRICT, SUNITE ZUOQI, INNER MONGOLIA, CHINA

Tiger Pacific Mining Corp. has entered into an agreement dated Sept. 30, 2004, with Hong Kong Howise Development Ltd. (HHD) and Inner Mongolia Tuoye Mineral Development (IMTM) to investigate and assess certain mineral properties with a view to establishing an initial exploration program to be financed by the corporation and the subsequent formation of a joint venture to carry out further mineral exploration at Erlian Ni-Cu prospect located in the district of Sunite Zuoqi, 30 kilometres northeast of Erlian City, Inner Mongolia, China. In consideration of approximately $125,000 (approximately 750,000 renminbis) to be paid to HHD and IMTM within 90 days of the date of the agreement ($25,000 of which was paid upon execution of the agreement), the corporation has the right to enter upon the property and conduct a detailed program of geophysical and geochemical analyses until Dec. 31, 2004. To partially finance its investigation of the property, the corporation proposes to use some of the proceeds that it intends to raise under its previously announce private placement.

Once the property is assessed by an independent geologist and is accepted by the TSX Venture Exchange, the corporation has agreed to establish with HHD and IMTM, a joint venture agreement for a term of three years for a co-operative project of joint venture exploration and exploitation of potential minerals on the property which comprises concessions known as permits registration No. 1500000410551, 1500000410647 and 1500000330516 issued by the Bureau of Land and Mineral Resources of Inner Mongolia autonomous region, China. In addition, a fourth concession adjacent to the concessions mentioned above is under application, and if approved, will be included in the property. Under the terms of the agreement, the proposed joint venture agreement will include that Tiger Pacific Mining can earn a joint venture interest of up to 80 per cent by making exploration expenditures of at least 16 million renminbis (equivalent to approximately $3-million) over the three-year term. The corporation can acquire an additional 10-per-cent joint venture interest in the property by paying its joint venture partners eight million renminbis (equivalent to approximately $1.3-million) within the three-year term. Pursuant to the terms of the proposed joint venture, the Chinese partners will retain a 10-per-cent carried joint venture interest and Tiger Pacific Mining will be the operator of the joint venture. The actual amount of expenditures to be incurred by the corporation for each of three years will be determined upon the nature of exploration work and will not be less than the minimum commitment required by Chinese mining and mineral exploration law.

In addition to the foregoing, pursuant to the proposed joint venture, based on exploration expenditures, the corporation will be required to issue, in tranches, to HHD and IMTM up to 2.9 million common shares of the corporation over three years at a deemed price of 60 cents per share and to pay HHD and IMTM a total of one million renminbis. Some or all of the common shares to be issued to HHD and IMTM may be subject to an escrow agreement pursuant to the policies of the TSX Venture Exchange.

The investigation and assessment of the property, including the analysis of previous exploration results, will be conducted within the next three months until Dec. 31, 2004, by Dr. X. Charlie Cheng, PhD, geology, the chairman and chief executive officer of the corporation, and the corporation's qualified person, as defined in National Instrument 43-101. The proposed joint venture contemplates the completion of an independent geological report regarding the property to be prepared in accordance with National Instrument 43-101.

This proposed transaction is subject to the sponsorship requirements of the exchange's policies. The corporation is under discussions with a potential sponsor with a view to retaining them to act as a sponsor in connection with the proposed transaction.