Pan Asia hopes to soon conclude sale of S. Kalimantan coal mine

By Romel S. Gurky

ASX-listed Pan Asia Corporation Limited (PZC) said it expects to finalize in the December quarter transaction with Glory Merry over the sale of its TCM coal mine project in South Kalimantan to the latter.

?During this quarter Glory Merry and its appointed technical consultants have spent considerable time and funds on the TCM site in Indonesia. The initial technical review is complete and it is understood that the feasibility study is positive in the prevailing thermal coal market. The attention is now on the legal titles and various licenses required to move the project forward to mining. Pan Asia Corporation Limited (PZC) executives and PZCs Indonesian partners are working closely with Glory Merry executives to finalize the last outstanding points. Finalization of this transaction is expected in the December quarter,? PZC said in a statement on Tuesday.

The company sees this as a positive step that provides essential funding for both the company and the project and provides a foundation from which the company can then regain momentum in the energy sector.

In May 2017, the company announced that it had entered in to a Heads of Agreement with Glory Merry Limited (GM) for the potential sale of the company?s 100 percent owned subsidiary, Innovation West Mantewe Pte Limited, which has a 75 percent interest in PT Transcoal Minergy, which owns the TCM coal project.

With improving coal prices, the company has been approached to sell its Innovation West. ?The board had been investigating this pathway in parallel with other established arrangements.?

Should the transaction not proceed after the due diligence period, GM will receive a 20 percent interest in the TCM Project in respect of the US$1 million invested and in the event that this cannot be provided by Pan Asia it shall be provided from the Indonesian project partners who will then receive 73,599,685 shares in the company.

If the transaction is to proceed, Pan Asia will receive US$9.25 million less any costs/debts on the project that remain to be cleared. These costs/debts include amounts owing to Kopex under their loan agreement, any contingent amounts due to Polo under the Pledge of Shares security arrangements and any outstanding arrears still due in Indonesia in respect of the TCM Project. A facilitation fee is payable to third parties should the Transaction complete, which has been set at 10 percent of the net amount received by Pan Asia, being US$9.25 million, less costs/debts as previously specified and deducted. This equates to between 5-6 percent of the total sale value.

Editing by Reiner Simanjuntak