Intention to advance the Lichkyaz-Tey Gold ProjectTamaya advised...

Intention to advance the Lichkyaz-Tey Gold Project
Tamaya advised in section 5.2(2) of the Bidder’s Statement that it proposed to
conduct an investigation into Iberian’s operations to identify how to explore and
develop, in the most effective manner, Iberian’s key tenement holdings. Tamaya
further advised in section 5.6 of the Bidder’s Statement that, subject to the
outcome of a review of Iberian’s operations, its intention, based on the
information known to it at the time, was to generally continue the operations and
business of Iberian in substantially the same manner as they were being
conducted.
Tamaya now advises that it has, with approval of the Board of Iberian,
commenced an operational review of Iberian. As part of this review, Tamaya has
completed a review of Iberian’s existing business plan and has determined that,
following the close of the Offers, it will request that the Board of Iberian advance
the Lichkvaz-Tey Gold Project in Armenia through the acquisition and
commissioning of a CIL plant for the treatment of Lichkvaz-Tey gold ore.
With this in mind, the Board of Tamaya resolved to acquire the Rishton Mill from
BMA Gold Limited (This acquisition is discussed in further detail below). Subject
to approval by the Board of Iberian (and Iberian shareholders if required under
the Corporations Act 2001 (Cth)), Tamaya intends to sell the Rishton Mill to
Iberian on commercial terms based on a valuation to be provided by an
independent expert for use by Iberian at its Lichkvaz-Tey Gold Project.
2. Tamaya’s acquisition of the Rishton Mill
Tamaya advised in section 1.4 of the Bidder’s Statement that it had an option to
buy back the Rishton Mill from BMA Gold Limited (BMA) (now in administration),
which was to expire on 29 October 2007.
Tamaya now advises that on 21 May 2007 it entered into an agreement to
purchase the Rishton Mill from the administrator of BMA for a purchase price of
A$3.5 million. Tamaya paid a deposit of $350,000 to the administrator of BMA
and must pay the balance on 5 July 2007 (Balance).
Upon payment of the Balance, Tamaya will acquire the Rishton Mill and will be
deemed to have exercised its option, and acquired the Rishton Mill, in
accordance with its prior option to buy back the Rishton Mill. No warranties were
given by BMA or the administrators in relation to the Rishton Mill.
Despite the Rishton Mill having the potential to significantly lower the economic
hurdles of a new discovery in the Charters Towers gold fields, as stated in
section 1.4 of the Bidder’s Statement, Tamaya has, following its review of
Iberian’s existing business plan, formed the view that moving the Rishton Mill to
the Lichkvaz-Tey Gold Project in Armenia represents a better use of the mill in all
the circumstances. This will significantly shorten the development period and
reduce the capital for the development of commercial operations at Lichkvaz-tey
and provides a tangible illustration of the merger benefits.
The financial impact of the acquisition of the Rishton Mill on Tamaya will be an
increase in assets (property plant and equipment) of $3,500,000, a decrease in
cash assets of A$350,000 (representing the deposit) and an increase in current
liabilities of $3,150,000.