Vancouver miner SouthGobi Resources Ltd. (TSX:SGQ) is facing suspension of its mining and exploration permits in Mongolia.
According to SouthGobi, the Mineral Resources Authority of Mongolia (MRAM) held a press conference yesterday in Ulaanbaatar announcing a request to suspend exploration and mining activity on certain licences owned by SouthGobi Sands LLC, a wholly owned division of SouthGobi Resources.
The request for suspension includes the licence pertaining to SouthGobi’s flagship Ovoot Tolgoi Mine.
The company said it has not received any official notification and has no reason to believe its licences are not in good standing.
SouthGobi said advice to the company suggests the action has been taken under the national security powers of the Government of Mongolia.
MRAM stated that the move is in connection with the proposed proportional takeover bid by Aluminum Corporation of China Ltd. (CHALCO) and the agreement by Ivanhoe Mines Ltd. to tender its controlling interest in SouthGobi to such a takeover. The suspension would be initiated to allow the Government of Mongolia to review the proposed change of ownership. (See “Ivanhoe Mines to sell SouthGobi shares to China” – BIV Business Today, April 2).
According to SouthGobi, statements have been made by various Mongolian stakeholders that there has been little information disseminated to them and no prior government consultation regarding the proposed transaction.
SouthGobi has requested Ivanhoe and CHALCO discuss their agreement and the proposed transaction involving the company with the Mongolian government.
