Desert Mines and Metals dials into molybdenum in South Korea

Desert Mines and Metals (ASX: DSN) will use an acquisition to gain exposure to the South Korean molybdenum sector, which includes the Daehwa Project - one of the largest historical molybdenum mines in the country.

At the project a South Korean Government funded drilling program in progress, with recent drilling 
confirming molybdenum and tungsten mineralisation. Importantly there is an established management and “in-country” team.

In regards to the deal, Desert Mines has entered into a binding Share Purchase Agreement for the acquisition of 100% of the issued capital of Korean Resources, which through its wholly-owned subsidiary  Limited has contractual rights to acquire several molybdenum exploration properties in South Korea.

Consideration for the deal includes Desert Mines issuing Indo Gold Limited and its nominees 20.7 million shares - which represents 14.9% of the issued capital of Desert Mines.

In addition Suyeon Mining Company will grant Indo Gold, subject to certain conditions, a 3% net smelter return royalty on future production revenues from the Daehwa tenements.

Completion of the Transaction is anticipated by the end of May 2013.


About the Daehwa Project

The Daehwa Project is located 100 kilometres southeast of Seoul in Chungbuk Province in the centre of South Korea, and contains two former molybdenum /tungsten mines, Daehwa and Donsan.

The Daehwa Project is comprised of three Mining Rights with granted tenure, subject to performance conditions, until 2027-2028.

The major ore minerals at Daehwa are molybdenite, wolframite, powellite and scheelite with minor amounts of chalcopyrite, sphalerite, galena, cassiterite and bismuthinite within fissure filling quartz veins.