Coal Fe teams up with Int?l power producer to acquire Jambi coal concession

Perth-based miner Coal Fe Resources Limited announced on Thursday it had on 22 August 2007 signed a Memorandum of Agreement with an unidentified multinational independent power producer listed on the New York Stock Exchange to jointly acquire stake at a coal concession in Jambi.

Coal Fe had in June 2007 had signed conditional share sale agreement with PT.Bungo Raya Nusantara (BRN) for the acquisition of 60 percent of shares of PT. Nusantara Thermal Coal (NTC), a holder of a third generation Coal Contract of Work concession in Muaro Bungo regency, Jambi, Southern part of Sumatra.

Among others, the power producer will consider entering into an off-take agreement to buy 1.5 million metric tonnes of coal from the mine for 6 years and to invest in the NTC acquisition, the company said.

Due diligence by the power producer is scheduled to be completed on or before 15 of September 2007.

According to the company, total non-JORC resource for the concession is estimated to be at 29.9 million tonnes.

Coal Fe will pay BRN US$35 million in cash and $15 million in shares.

NTC coal has CV range of 5,676 ?6,900Kcal/kg. (alex)