Coalworks' unit in S. Kalimantan JV deal
Monday, March 14 2011 - 02:56 AM WIB
?The JV area is close to the Arutmin coal mine owned by PT Bumi Resources, formerly owned by BHP and is close to a number of coal terminals which could be utilized to transport coal to customers,? the company said in a statement..
Orpheus is currently carrying out legal and technical due diligence with respect to the tenements in preparation for the planned divestment of Orpheus into a separate listed company, namely Orpheus Energy Limited, expected to be completed by May, it said.
The JV deed provides for Orpheus to spend US$750,000 on exploration and a mine feasibility study with a view to early coal production. Upon a JORC measured resource being established Orpheus is to pay US$0.50 per tonne of coal to Mega in consideration of Orpheus receiving 50% of the Joint Venture.
Upon the ASX listing of Orpheus Energy Limited, an initial advance of US$5 million is payable to Mega who will also have received shares equivalent to 15% of the post listed issued capital of Orpheus Energy Limited, all of which is credited towards the US$0.50 per tonne payment to earn 50% of the Joint Venture.
The US$5 million advance is subject to at least 20Mt of JORC measured coal being established. The Joint Venture provides for Orpheus .to receive 50% of the shares in PT Prima and PT Pelita (associated with Mega) who own the Kintap Tenements. In this regard a shareholders? agreement and a share purchase agreement have also been entered into with Mega.
In the event that the JORC measured resource exceeds 100 million tonnes of coal the purchase price is capped in that it cannot exceed $50 million. The agreement provides the option for Orpheus to pay further consideration, up to the $50 million cap in the form of shares or out of profits from the Kintap Joint Venture. The $750,000 in exploration costs is also credited against these payments.
Orpheus signed a strategic alliance in 2010 with Mega to facilitate the acquisition of further coal projects. The Kintap JV builds on the first joint venture signed pursuant to the strategic alliance, namely, the B26 coal project which is currently in a trial mining phase.
At B26, overburden has now been pre stripped and coal product stockpiles established. Coal will then be trucked to the barge loader site to create coal loader stockpiles in readiness for loading to barges. An offtake agreement for a trial shipment of the first 25,000 tonnes of coal has been signed and deposit of $500,000 already paid. (kanti)