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NiHAO Mineral Resources International Agreement with Capital Gold Pty Ltd and Welcome Stranger Mining Ltd

During the meeting of the Board of Directors (the "Board") of NiHAO Mineral Resources International, Inc. (NiHAO) held on September 17, 2012, the Board approved the execution, delivery and performance of a Memorandum of Agreement (the MOA) by and among NiHAO, Capital Gold Pty Ltd (Capital Gold), and Welcome Stranger Mining Ltd (Welcome Stranger), for the acquisition by Capital Gold and Welcome Stranger from NiHAO of forty percent (40%) of the issued share capital of Masbate 13 Philippines Inc. (Masbate 13), as subsidiary of NiHAO's wholly-owned subsidiary, Oregalore, Inc. (Oregalore).
Capital Gold is a company incorporated under the law of the State of the New South Wales, Australia, while Welcome Stranger is a public company listed on the Australian Securities Exchange (ASX).

Masbate 13 is the registered holder of the exploration license in respect of the gold, copper prospect of the Mandaon tenement situated in the Municipality of Mandaon, Masbate Island, Philippines, covering initially 16,129 hectares (the Masbate License) under its original Exploration Permit of 2008 and then excised to around 8,357.35 hectares under its current Exploration Permit EP-V-2008-005 (First Renewal) of 2011 that further defined the mineable areas in the subject mining tenement.

The MOA supersedes the Memorandum of Understanding (MOU) executed on January 10, 2012 by and among Capital Gold and NiHAO together with Capital Resources Corporation PLC (Capital Resources) which was likewise disclosed to the PSE on the same date. Supervening events have transpired which prevented Capital Resources from performing commercial undertakings, deliveries and covenants as outlined in the MOU. However, despite the expiration of the MOU, Capital Gold, on its own, continued to negotiate with NiHAO with a view of concluding a mutually beneficial commercial transaction under terms and conditions acceptable to the parties.

Subject to the satisfaction of certain conditions, the Parties to the MOA have agreed that:

(a)  Welcome Stranger shall acquire forty percent (40%) of the entire issued and outstanding share capital of Masbate 13 in consideration for which NiHAO/Oregalore shall receive Fifty million (50,000,000) shares in Welcome Stranger (the Subscription) at an indicative listing market value of twenty Australian cents (AUD 0.20/share) per share.

(b)  Welcome Stranger will pay to NiHAO / Oregalore a cash consideration of two hundred fifty thousand US dollars (US$250,000); and

(c)  At the end of the Transaction, the Parties shall have shareholdings in Welcome Stranger in accordance with the following ownership structure:

Company/EntityNumber of SharesPercentage of Ownership
Original shareholders9,120,4523.59%
Capital Gold80,000,00031.48%
Dizon Copper-Silver Mines, Inc.90,000,00035.42%
NiHAO50,000,00019.68%
New shareholders after capital raising25,000,0009.84%
TOTAL254,120,452100.00%

(d)  Welcome Stranger shall have the option to buy an additional forty percent (40%) of the entire issued and outstanding share capital of Masbate 13 upon terms and conditions acceptable to NiHAO.

The rights and obligations of the Parties pursuant to the MOA shall be conditional upon the following conditions being satisfied (or waived by the appropriate Party, in its absolute discretion) by no later than 5:00pm EST on October 31, 2012 (or such later date as may be agreed in writing between the Parties) (the "Long Stop Date"):

(a)  the Parties entering into a formal share sale agreement, subscription agreement and shareholders agreement (the "Formal Agreements") relating to the Transaction on terms and conditions acceptable to all Parties (acting reasonably). Among other things, Parties shall change the name of Welcome Stranger Mining Ltd. to NoA Mines Ltd. or such other names which the Parties may hereinafter agree to subject to approved by the Australian body.

(b)  NiHAO being satisfied that Capital Gold and Welcome Stranger have the financial, legal, operational and technical capabilities to undertake the Transaction;

(c)  Capital Gold receiving a satisfactory legal opinion from its Philippines counsel as to the validity and enforceability of the Formal Agreements under applicable Philippine laws;

(d) Welcome Stranger shareholders approving the transaction in a general/special meeting that will be called for the purpose;

(e)  Welcome Stranger obtaining all other regulatory and shareholder approvals in accordance with the Corporations Act 2001 (Australia), the ASX Listing Rules and Welcome Stranger's constitution;

(f)  ASX providing Welcome Stranger with a list of conditions, following Welcome Stranger obtaining all required shareholders approvals which, when satisfied, will result in the ASX lifting the suspension on the Welceom Stranger's Shares trading on ASX; and

(g)  The agreement between Capital Gold, Welcome Stranger, and Dizon Copper-Silver Mines, Inc. is likewise fulfilled with respect to the capital raising activities and the corresponding vending-in of the property of Dizon Copper-Silver Mines, Inc. into Welcome Stranger as stated under said Agreement.

(together), the "Conditions").

Requesting Party, during the period commencing on the date of signing of the MOA (the Effective Date) and expiring on the Long Stop Date shall provide the other Party with all reasonable assistance and relevant information as may be required by the Other Party for the purposes of enabling completion of a Due Diligence in accordance with the terms of the MOA.

Capital Gold and Welcome Stranger acknowledge the completion of legal and technical due diligence on NiHAO, Oregalore and Masbate 13 relating to the gold, copper gold prospect situated in the Municipality of Mandaon, Masbate Island, Philippines (the Masbate Business") to the sole satisfaction of Capital Gold and Welcome Stranger.
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"NiHAO Mineral Resources International Agreement with Capital Gold Pty Ltd and Welcome Stranger Mining Ltd" was written by Mary under the Business category. It has been read 2528 times and generated 0 comments. The article was created on and updated on 18 September 2012.
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