Undur Tolgoi to Acquire Mongolian Road Construction Company
November 7, 2013
ULAANBAATAR, MONGOLIA – Undur Tolgoi Minerals Inc. (“UTM” or the “Company”) (CNSX:UTM) is pleased to announce that it has entered into an agreement to acquire, through its wholly owned British Virgin Island-registered subsidiary, Jucca Holdings Ltd., a 100% interest in Great Hoard Holdings SARL, a Luxembourg entity that holds a 75% of the share capital of Ashid Munkhiin Zam LLC (“AMZ”), a Mongolian company, in an exchange for 5,363,636 newly issued shares of UTM. AMZ holds road construction, repair and maintenance permits. AMZ intends to seek road construction contracts and tenders in Mongolia.
Road construction is one of the fastest growing industries in Mongolia. The government intends to build over 10,000 kilometers of paved road in the next 10 years. As part of its goal, the government passed a law in 2012 mandating paved roads between Ulaanbaatar and each of the country’s 21 province centers by 2016.
Last year Mongolia raised USD$1.8 billion in its first ever bond offering. Shortly afterward the government announced that most of the bond money would be spend on development of infrastructure and allocated USD$335 million to the road budget.
Mongolia’s roads officially total 49,294 km, but only about 25% of the roads are currently paved. Most roads are little more than dirt tracks, which are usually dusty and occasionally muddy. By undertaking straightforward grading work, the roads would be quite similar to those servicing many of the mining and outback communities in Australia.
UTM’s CEO, Donald Padgett, stated, “UTM is grateful for the support of its largest shareholder, Firebird Management, and its affiliated team in Mongolia, in assisting the company in the identification and incubation of new venture opportunities in Mongolia.”
Following completion of the acquisition, UTM will have 64,351,484 shares outstanding.
James Passin, UTM’s Chairman, commented, “We are excited to enter the road construction industry in Mongolia. For the benefit of its shareholders, we are committed to building UTM into a significant and successful Mongolian-focused public company. Following a strategic review of the company, the Board of Directors is refocusing the company away from mineral exploration in order to participate in Mongolia’s massive infrastructure growth potential.”
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