VANCOUVER, Sept. 15, 2014 /PRNewswire/ -Golden Queen
Mining Co. Ltd. (TSX:GQM; OTCQX:GQMNF) (the "Company" or
"Golden Queen") is pleased to announce that it has closed the joint
venture transaction with Gauss LLC ("Gauss"). Pursuant to the
closing of the transaction, Gauss has invested US$110million in cash in exchange for a 50% joint
venture interest in the Soledad Mountain Project ("the
Project"). Gauss is a joint venture owned by Leucadia
National Corporation (NYSE: LUK) and Auvergne, LLC, an investment
vehicle owned by certain members of the Clay family.
The Project is a fully-permitted, open pit, heap leach gold and
silver project located just outside the town of Mojave in Kern
County, California. The Project will use conventional open
pit mining methods and the cyanide heap leach and Merrill-Crowe
processes to recover gold and silver from crushed, agglomerated
ore. Construction has started and commissioning is planned
for late 2015.
The Joint Venture
Pursuant to the joint venture transaction, Golden Queen converted its wholly-owned
subsidiary that is developing the Project into a California limited liability company named
Golden Queen Mining Company, LLC ("GQ California"). On
closing of the transaction, Gauss acquired 50% of GQ California in
exchange for its US$110 million
investment. Golden Queen Mining Holdings, Inc. ("GQ Holdco"),
a newly incorporated subsidiary of Golden
Queen, holds the other 50% of GQ California.
The parties have entered into a joint venture agreement that
provides, inter alia, details of how the Joint Venture will be
managed and the obligations of each of the parties in connection
with further funding requirements. GQ California is managed
by a board of managers comprising an equal number of
representatives of each of Gauss and GQ Holdco. The initial
officers of GQ California are Lutz
Klingmann as Chief Executive Officer, and Andrée
St-Germain as Chief Financial
Officer.
On closing of the joint venture transaction, GQ California
applied part of the investment of US$110million to repayment of principal and
accrued interest on the US$10 million
bridge loan advanced by Leucadia National Corporation and Auvergne,
LLC in July 2014. GQ California will
apply the remainder of the investment to the continued development
of the Project. Golden Queen
is currently evaluating financing alternatives to fund the capital
contribution to GQ California that is required pursuant to the
terms of the joint venture agreement.
Additional details on the Joint Venture are available on the
Company's website at www.goldenqueen.com, on SEDAR at www.sedar.com
and on Edgar at www.sec.gov.
Caution With Respect To Forward-Looking Statements: The
information in this news release includes certain "forward-looking
statements". All statements in this news release, other than
statements of historical fact, including, without limitation, the
estimated proceeds from additional commitments to fund the joint
venture and the projections for a fully funded project; the
expectation that Golden Queen will
successfully fund the required capital contribution to GQ
California; plans for and intentions with respect to capital
requirements, construction and other development activities on the
Project; expectations related to management and operation of GQ
California and future mining operations on the Project, are
forward-looking statements. There can be no assurance that such
statements will prove to be accurate, and actual results and future
events could differ materially from those anticipated in such
statements.
Important factors that could cause actual results to differ
materially from statements in this news release regarding our
intentions include, without limitation, risks and uncertainties
regarding: failure to fund the Company's required capital
contribution to GQ California in accordance with the joint venture
agreement and related dilution in GQ California; the development
and operation of the Project, including additional capital
requirements for the Project, accidents, equipment breakdowns and
non-compliance with environmental and permit requirements; and
other risks and uncertainties disclosed in the section entitled
"Risk Factors" contained in our Annual Report on Form 10-K for the
year ended December 31, 2013 and our
Quarterly Report on form 10-Q for the period ended June 30, 2014.
Investors are cautioned that forward-looking statements are not
guarantees of future performance and, accordingly, investors should
not put undue reliance on forward-looking statements. Any
forward-looking statement made by us in this news release is based
only on information currently available to us and speaks only as of
the date on which it is made.
SOURCE Golden Queen Mining Co. Ltd.