Emed Mining Public Limited - Agreement with owner of lands required for waste deposition at Rio Tinto Copper Mine - Proposed Us$5 million subscription

AIM: EMED
TSX: EMD

NICOSIA, Cyprus, July 9, 2012 /CNW Telbec/ - EMED Mining Public Limited ("EMED Mining" or "the Company") (AIM: EMED) (TSX: EMD) - EMED Mining, the Europe-based minerals development and exploration company, is pleased to announce that it has entered into a Sale and Purchase Agreement ("SPA") with Rumbo 5-Cero, S.L. ("Rumbo"), part of an established diversified Andalucían investment group, in relation to the €10 million purchase of certain land plots (covering part of the tailings dams) (the "Land") owned by Rumbo adjoining the Rio Tinto Copper Mine (the "Mine").  The acquisition of the Land is required in order to restart production at the Mine and satisfies almost all of the project's needs for tailings deposition from proposed operations.

In addition, the parties intend to enter into a 50/50 joint venture (the "Joint Venture") - of which EMED Mining will be the operator - to test and potentially exploit some tailings and waste dumps.

These arrangements with Rumbo are a significant step forward in the proposed development of the Mine.

The Company is also pleased to announce that major shareholder and cornerstone customer Yanggu Xiangguang Copper Co. Ltd ("XGC") has conditionally agreed to subscribe for 32,247,662 new ordinary shares of 0.25 pence each on the Company (the "Subscription Shares") at a price of 10 pence per share for aggregate proceeds of US$5 million (the "Subscription").  These funds will be partly applied in funding the cash consideration for the acquisition of the Land.

Harry Anagnostaras-Adams, Managing Director, said: "The agreement with Rumbo is a major step forward for the planned restart of the Mine. It not only facilitates ownership of over 95% of the project lands, but also establishes a long term commercial alliance with an important Andalucían business group."

"The concurrent support from our shareholders is greatly appreciated and we are pleased to welcome an even closer relationship with major Chinese copper smelter group XGC who now also intends to appoint a representative to our Board of Directors."

"We are delighted with the continued progress on all fronts.  We have been working hard with all parties to trigger the Rio Tinto Copper Mine restart by the end of 2012 - with the infrastructure in place, a proven resource to mine and financing arrangements conditionally agreed, we are well positioned to recommence mining operations as early as possible once regulatory approvals permit."

Land Acquisition
EMED Mining will acquire the Land for a total consideration of €10 million (plus applicable taxes), to be satisfied as follows:

• €1 million which was paid in cash on execution of the SPA;
• €3.5 million payable in cash on closing of the Land acquisition ("Closing") being not later than 28 September 2012; and
• €5.5 million to be satisfied by the allotment of 48,549,234 new ordinary shares of 0.25p each in EMED Mining (the "Consideration Shares") at 9.14 pence per share on Closing. Rumbo has undertaken not to dispose of the Consideration Shares until the earlier of: (i) receipt by EMED Mining of all permits; (ii) 2 years after the date of Closing; or (iii) the date on which EMED Mining disposes of the Land or its interest in EMED Tartessus, EMED´s wholly owned subsidiary and owner of the Mine.

Royalty
EMED Mining has also granted Rumbo a royalty for a period of 10 years of up to US$250,000 per quarter where, for the relevant quarter, the average of the LME copper price or the sale price achieved by EMED mining is US$2.60/lb or more. Under certain circumstances EMED Mining can defer a particular quarter's royalty payment.

The royalty starts on the earlier of 18 months after the first sale of copper from the Mine or 6 months after a continuous rate of production of 9Mtpa has been achieved.

Joint Venture
EMED Mining and Rumbo have also agreed to establish a 50/50 joint venture to test and potentially exploit the tailings and waste dumps. The Joint Venture will conduct a study to investigate the economic feasibility of processing the tailings and waste material. EMED Mining, as operator of the Joint Venture, will endeavour to ensure that any future processing of the tailings and waste and the operation of the Mine can be carried out in parallel. However, to the extent that the two operations are not compatible, the Mine will take precedence.

EMED Mining will be responsible for the initial costs of the Joint Venture up until the completion of the feasibility study, such costs to be capped at a total of €2 million.  Rumbo's 50% share of these costs will be deducted from its royalty entitlement. After this, each party will fund its pro-rata share of the costs of the Joint Venture.

Please click link below to view the map delineating the land owned by EMED Mining and the land required for restart of the Mine.

Subscription Agreement with XGC
The Company and XGC have entered into a subscription agreement (the "Subscription Agreement") pursuant to which a subsidiary of XGC, Hong Kong Xiangguang International Holdings Limited ("Xiang Guang HK"), has conditionally agreed to subscribe for the Subscription Shares at a price of 10 pence per share for aggregate proceeds of US$5 million. The proceeds of the Subscription will be used to fund the cash consideration of the acquisition of the Land and for general working capital purposes.

Contemporaneously with the closing the of the Subscription Agreement, the parties have also agreed to amend the current off-take agreement between XGC and EMED Marketing Limited to increase the amount of copper to be sold to XGC from 25% to 30% of the Mine's production for the first 10 years of commercial mine production based on its current reported copper reserves and have agreed to vary the right previously granted to XGC to appoint a director to the EMED board of directors (the "Board") such that the only requirement is that XGC's and Xiang Guang HK's combined interest in the issued share capital of the Company equals or exceeds 8%.

The Subscription Agreement is subject to certain conditions including the approval of the Toronto Stock Exchange; the approval of the Chinese National Development and Reform Committee and admission of the Subscription Shares to trading on the AIM market ("Admission"). Such conditions are required to be satisfied (or where possible, waived) on or before 28 September 2012.

XGC currently holds approximately 10.84% of the issued and outstanding shares of the Company.  Accordingly, the transactions with XGC are "related party" transactions as defined in Multilateral Instrument 61-101.  The transactions with XGC are exempt from the requirement to obtain a formal valuation and minority shareholder approval as the value of the transactions are less than 25% of the market capitalisation of the Company. Upon completion of the Subscription and following the issue of the Consideration Shares, Xiang Guang HK will hold approximately 12.55% of the fully-diluted share capital and approximately 13.48% of the issued capital of the Company. Although XGC currently has the right to appoint a person to the Board provided certain conditions are met, they have not yet done so and, as such, XGC was not party to any discussions in respect of the transactions at the board level and the transactions were negotiated at arm's length.

XGC has undertaken not to dispose, and procure that Xiang Guang does not dispose, of any interest in the Subscription Shares for a period of 6 months following completion of the Subscription, save in certain limited circumstances.

Application will be made in due course for Admission and an announcement made at that time with respect to the expected date of Admission.

SOURCE EMED MINING PUBLIC LIMITED

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