Killara completes transaction to become coal producer
Monday, May 27 2013 - 07:41 AM WIB
ASX-listed Killara Resources reported on Monday that it has exchanged contracts on the acquisition of an 80% interest in East Kalimantan thermal coal producer PT Borneo Emas Hitam (BEH).
The company in the statement said that together with strategic alliance partner and major shareholder the Zulkarnaen family, Killara will pay $2.2 million for its share of BEH.
In addition, the company will obtain an option to acquire a 60% interest in PT Pagun Taka (PT), a prospective coal concession in Central Kalimantan.
The transaction moves Killara from a junior mining explorer to an Indonesian coal producer and provides the company with both a coal producing mine and a green field coal opportunity, an exciting transition for the company.
Key commercial terms of the agreement are:
? Killara to pay US$2.2 million for 80% of BEH.
? Operational control moves immediately to Killara.
? Killara nominated personnel to join the BEH board, with Killara gaining majority representation.
? Killara will pay an additional US$3.00 per ton above a minable reserve threshold of 733,333 tons ensuring that the cost of acquisition remains at US$3.00 per ton.
? Option to acquire a 60% interest in PT Pagun Taka. Killara has 12 month exclusivity on this concession and subject to its due diligence, car acquire a 60% interest by paying an equivalent of US$1 .25/ton on a minable reserve.
? Minable reserve estimates are subject to an independent technical assessment.
Killara said that the company has completed the first phase of technical due diligence and field reconnaissance at BEH.
It said that the current production permitting land compensation, infrastructure, forestry classification and existing geological information should allow Killara to commence mining activities in this area within an estimated 4 to 6 months.
Editing by Adianto P. Simamora