China Mineral Acquisition Corp. (OTCBB:CMAQ) has abandoned its plan to merge with Ivanhoe Energy Inc.’s (TSX:IE) China-based oil and gas operating subsidiary, Sunwing Energy Ltd., Ivanhoe said Monday.

Instead, Vancouver-based Ivanhoe Energy will retain full ownership in its Chinese operating unit. In February, Ivanhoe announced it had signed a non-binding deal to merge Sunwing with China Mineral, a U.S. public company with cash but no other assets, current operations or full-time employees.

The $100-million-US share swap deal would have provided the merged entity, China Ivanhoe Energy, with a U.S. stock market listing. Ivanhoe Energy would also have retained 75 to 80 per cent ownership of the company.

However, China Mineral backed out after it was unable to extend its deadline to complete the merger, Ivanhoe said Monday.

Sunwing Energy is the corporate flagship for Ivanhoe Energy’s existing operations in China and has carried out oil and gas development in the Asian country for more than 11 years.

China Mineral, based in Delaware, is a so-called “blank cheque” company, formed to effect a merger or other business combination with a company operating in China.

Ivanhoe said it won’t incur any extraordinary fees nor will it be obligated to make any payments to China Mineral as a result of the proposed business transaction not being completed.

Ivanhoe is an independent international oil and gas explorer, using technology to upgrade heavy oil to light oil, recover new oil from older fields and convert natural gas to liquids. The company’s core operations are in the United States and China.

On Monday, Ivanhoe Energy shares fell two cents to close at $2.13 on the Toronto Stock Exchange.

This entry was posted by Miner on Thursday, August 31st, 2006 at 9:05 pm and is filed under Mining Services. Tags: China, China Mineral Acquisition Corp., Delaware, heavy oil, Ivanhoe Energy Inc., light oil, Natural Gas, Oil, Oil and Gas, oil and gas development, oil and gas explorer, Sunwing Energy Ltd., Toronto Stock Exchange, United States, Vancouver. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.