Cokal sells non-core assets, enters discussions for larger transaction
Monday, May 16 2016 - 01:58 AM WIB
ASX-listed Cokal Limited said Monday it has entered into a non- exclusive Memorandum of Understanding with Indonesian company Blackspace to enable discussions and due diligence to be undertaken with the objective of Blackspace providing funding for the development of Cokal?s Bumi Barito Mineral Coal Project (BBM) in Central Kalimantan, and or a possible corporate level transaction.
Cokal said in a statement that BBM is the only Indonesian mining project to obtain full mining approval in the last two years.
In addition, Cokal said, Blackspace wish to also acquire some of Cokal?s non-core tenements. Cokal also announced Monday the completion of the sale of its 75.2 percent interest PT Silangkop Nusa Raya and PT Ketungau Nusa Raya for US$160,000 to PT Jinantra Karya Raya the Indonesian company that recently acquired Cokal?s 75 percent interest in PT Anugerah Alam Manuhing.
?Cokal considers this a sale of isolated non-core tenements located a considerable distance west and north, in another geological formation, from Cokal?s main tenements located in Central Kalimantan. It was therefore considered appropriate in the current climate to realize this value and to use the funds for working capital while the Board pursue the funding options previously announced,? the company said in the statement.
Blackspace is focused on developing a significant mining and natural resources processing businesses in Southeast Asia, particularly in Indonesia. It has been very active in recent months, expended in excess of $500 million and has acquired a number of such projects and operation to build a strong pipeline of high quality developments, the statement said.
The statement further explained that Blackspace provides project management services to a number of mining and natural resources processing businesses in Southeast Asia. Their main focus is on mining of high-quality coal and production of ferronickel applying exclusive and unique technology. The company's project pipeline also includes geological exploration and development of manganese. Blackspace?s core mission is to efficiently use the natural resources while ensuring long-term sustainable development of projects.
In the framework of the projects? implementation a new transport infrastructure is being considered. It will support further industrial development of the regions rich in minerals. A project for construction of railway that will connect Central Kalimantan and the sea in the south of the island was launched - TKRK or Trans Kalimantan Rel Kereta Api. Moreover, a project for a sea port construction in the south of Kalimantan is also on the agenda. Mined coal will cover domestic industrial demand in Indonesia, and export needs. It will also be used in production cycles of other projects. Blackspace is also looking at other opportunities of high-quality steam coal mining in the country.
A Blackspace controlled company also recently acquired Cokal?s 75 percent interest in PT Anugerah Alam Manuhing (AMM). The sale of AAM and the planned additional sales of other non-core tenements along with the possible additional development funding has enabled Cokal to develop a constructive working relationship with a party which shares Cokal?s belief in the potential and significances of Indonesia?s coal projects. This may in turn enable Cokal to successful restructure its balance sheet and start construction on BBM. These initial discussions have received the support of Platinum Partners, Cokal?s largest shareholder and debt provider.
?While discussions to date with Blackspace have been constructive and positive, their outcome is speculative and shareholders should be aware that there is no certainty that any agreement will be reached,? Cokal ended.
Editing by Reiner Simanjuntak