Killara enters into sale agreement of Borneo Emas Hitam

By Ruli Setiawan

ASX-listed Killara Resources Ltd said that in order to pursue new local opportunities, it has signed a binding sale agreement to divest its interest in PT Borneo Emas Hitam (BEH), a coal miner with concession in East Kalimantan.

The company said that it has decided to divest its coal asset due to the lingering drop in coal price.

?Whilst the Killara directors and management performed commendably, firstly acquiring a producing coal asset, moving into production and subsequently delivering a maiden shipment of thermal coal to Glencore, a major global coal trader, the current low commodity price of coal has led the board to determine that it is not financially economic and it is in the best interests of shareholders to divest this assets,? Killara said in a statement Tuesday.

A purchasing consortium led by two of Killara?s current Directors, Wim and Reza Zulkarnaen, has agreed to purchase the Indonesian interests held by Killara on the following key material terms:
1. Share buy-back and cancellation of 32,960,000 fully owned shares held in Killara Resources Ltd, currently representing 24.88 percent of the issued capital of Killara Resources Ltd.
2. The payment of $100,000 cash.
3. The novation of Killara Resources Ltd debt held by Wim Zulkarnaen with a current value of $960,000, inclusive of any accrued expenses owed to the above directors.

As this transaction is a related party transaction, a valuation of the mining interests, an independent expert report and shareholder approval will be sought at an EGM which will be scheduled as soon as possible. Subject to the approval of the transaction by shareholders, Wim and Reza Zulkarnaen will also be resigning as directors of the company, the company said.

?As stated in our last quarterly report, Killara Resources Ltd directors, both Matthew Driscoll and Robert Kipp continue to assess alternative investment opportunities on behalf of shareholders. Several local venture opportunities have been assessed and an update to the market will be provided once a binding agreement has been entered into,? it said.

Editing by Reiner Simanjuntak