Anglo joins Eden Roc in Cote d’Ivoire

Eden Roc Mineral (EDN-T) has signed a letter of intent to form a joint venture with South African-based major Anglo American encompassing all of Eden Roc’s gold properties in southeastern Cote d’lvoire, including the Afema gold mine.

At Afema, which is soon to close, the mining permit is held by SOMIAF, which is 68% owned by Eden Roc and 32% owned by the Ivorian government, whereas two adjacent exploration permits — PR-33 and PR-51 — are 90% owned by Eden Roc and 10% owned by the government. Under the new agreement, it is anticipated that SOMIAF will be wound down and all future work will be carried out by the Eden Roc-Anglo joint venture.

Anglo can earn a 60% interest in the permits by funding and managing all exploration needed to complete a prefeasibility study within four years.

During the first year of the agreement, Anglo must spend at least US$500,000.

After a prefeasibility study is completed, the partners will fund exploration according to their respective participating interests. Should a feasibility study be completed, Eden Roc can participate on a pro rata basis in any debt financing arranged by Anglo for a fee of 3%.

If Eden Roc is diluted below a 10% interest, chooses not to proceed with a feasibility study or chooses not to carry out the recommendations of a feasibility study, its interest will be replaced with a 1%

net-smelter-return royalty. If any of the above descriptions come to apply to Anglo, its interest will be reduced to a 25% net-profits royalty.

Meanwhile, Eden Roc and its banker, Rothschild Australia, have completed the previously announced reworking of a US$5-million loan to SOMIAF into convertible debt which comes due Dec. 31, 1999. Rothschild can convert all or part of the loan into Eden Roc shares at a conversion price determined by the shares’ market price, less a 15% to 20% discount. However, Eden Roc has already repaid US$420,000 of the loan and anticipates that its debt will be further reduced by US$2 million when proceeds from the imminent sale of equipment are received.

“This joint venture with Anglo is a tremendous boost for us,” said Eden Roc President Mario Caron during a conference call. “We will be seeing some activity on site in the near future.

“Even though these are difficult times, we are getting the support of our major lender, and now that we have resolved Eden Roc’s main difficulties, we can turn to the future and start to look aggressively at acquiring new assets.”

With the oxide ore at Afema nearly depleted, Eden Roc spent the first quarter of 1998 winding down the operation, laying off staff and preparing surplus equipment for sale. The company plans to continue leaching gold until the end of July, when the adsorption-desorption plant will be shut down.

Gold production was 2,809 oz. during the quarter ended March 31, compared with 4,413 oz. in the corresponding period in 1997.

For the first quarter of 1998, Eden Roc posted a net loss of $698,000 (or 1 cents per share) on revenue of $316,000. This compares with a first-quarter 1997 loss of $1.73 million (4 cents per share) on revenue of $2.1 million.