Cokal: Lender completes due diligence on royalty agreement
Friday, June 9 2017 - 12:45 PM WIB
ASX-listed Cokal Ltd said on Friday that its lender, Platinum Partners, has completed due diligence process on a proposed royalty agreement, under which the former will convert its entire US$13.8 million debt owed to the latter into yearly royalty from Cokal?s share of production from the Bumi Barito Mineral (BBM) and Tambang Benua Alam Raya (TBAR) coal projects in Kalimantan.
Cokal said in a statement that Platinum was satisfied with the results of the due diligence, which is part of conditions for the implementation of the royalty agreement announced last month in a bid to make Cokal loan free, and entice investors considering to provide funds for the company to start production in the coking coal projects. The other conditions include approval of Cokal shareholder, project funding, commercial production and the grant of security for the royalty.
?The company will now progress the shareholders meeting to approve this transaction and associated matters,? Cokal said in the statement.
?The funding secured for the development of the BBM PCI coal mine as detailed in the company?s announcement of May 24, 2017 and the commencement of production from this project will fulfil the preconditions for commercial production required for the debt to royalty agreement to come into effect,? it added.
The company said it has commissioned an independent Reserves Report for BBM in accordance with the 2012 version of the JORC Code. Following this Reserves Report, Cokal said it has also commissioned an independent valuation of Cokal?s assets in accordance with the VALMIN Code. Both reports are expected to be completed this month and will be released to the market when received.
Domenic Martino Chairman of Cokal commented: ?This is another positive step forward for the company in achieving its goal of building an export metallurgical coal mining operation at the BBM project and the company can now confidently move forward with the aim to commence production by the end of this year?.
Editing by Reiner Simanjuntak