Mongolia explorer Xanadu agrees joint venture with Noble Group

Xanadu Mines said Friday it has entered into a strategic alliance with major commodities trader Noble Group to explore and develop coking coal, iron ore and ferroalloys opportunities in Mongolia.

Xanadu and Noble will participate through new joint venture companies with each party holding 50% stakes, while existing assets held by Xanadu will not form part of the strategic alliance, the ASX-listed mining explorer said in a statement.

The agreement includes a placement of shares to Noble, taking Noble's equity interest in Xanadu to 9.9% on the transaction date of March 23, it said. The capital raised "will be exclusively applied to the exploration and development of opportunities in Mongolia," it said.

"The alliance, while focusing on coking coal, iron ore and ferroalloys, will also allow Xanadu to continue to advance its existing Galshar and Khar Tarvaga thermal coal projects and its copper gold assets in the south east Gobi," Xanadu's chairman Brian Thornton said in the statement.

Xanadu is a Mongolian exploration company which listed on the ASX on December 21, 2010, raising A$24 million ($24.4 million).

--Hector Forster, hector_forster@platts.com

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