Cokal announces Blumont financing proposal
Tuesday, October 8 2013 - 02:27 AM WIB
ASX-listed Global metallurgical coal group Cokal Ltd confirms it has been in discussion with Singapore-listed investment firm Blumont Group Ltd (Blumont) about a US$77 million funding package designed to fund the equity requirements for the BBM coal project in Central Kalimantan as well as general corporate requirements.
The latest development comes following earlier statement from Blumont that it was finalizing commercial terms for a proposed takeover of Cokal, which confirmed in a statement received on Tuesday that discussions were also close to finalization on a potential takeover offer of A$124 million.
There has been a significant downward movement in Blumont's share price. In response to an SGX price query Blumont advised on 4 October 2013 that a local broking house had recently declared Blumont's shares as designated securities and that this may be a contributing factor to the volatility in its share price.
The movement in the Blumont share price materially and adversely affected the commercial terms of the takeover proposal. Blumont and Cokal continue to believe in the strategic merit underpinning Blumont?s proposals, further discussions are now occurring to restructure the financing and potential takeover offer, Cokal said in the statement.
Directors believe that such takeover proposals should be developed and brought to shareholders for them to decide on. Shareholders should be aware that there is no certainty that any Blumont proposals will be made.
?Due to the commitment of both parties to the development of the BBM project the priority is the provision of the US$77 million facility to enable Cokal to build the mine and associated infrastructure to reach first production next year,? Cokal said. ?Due to this priority, while the negotiations to restructure the financing package continue, Blumont has made available a loan facility of up to US$8m to continue the development work. US$4m is due by 1 November 2013 with the balance on mutual agreement.?
The BBM Coal Project (IUP 188.45/149/2013) is situated in Central Kalimantan, Indonesia in the prospective metallurgical Upper Barito Coal Basin , Regency of Murung Raya. The Project covers an area of 15,000 hectares. The Project is adjacent to the BHP Billiton?s, Indomet Coal, Joloi Project in Murung Raya Regency.
BBM currently has a JORC Resource of 77 Million tonnes (Mt) in multiple seams comprised of 70Mt Inferred and 7Mt Indicated Resources. Cokal has also been working on converting the 200 to 350Mt additional Exploration Target1 in to JORC resources. Cokal is completing definitive studies and obtaining the necessary approvals with the aim of commencing construction in late 2013 which would see first production occur in the first half of 2014.
Editing by Reiner Simanjuntak