PHI Energy acquires additional Indonesian coal assets

U.S firm PHI Energy Corporation, a minority owned subsidiary of PHI Group, Inc., in partnership with AXN Group LLC, announced Thursday that it has signed an asset purchase agreement to acquire additional coal mine assets from PT Dian Anugrah Pratama (DAP).

Under the deal, PHI Energy will acquire total estimated mineable coal reserves of 33 million metric tons located in West Sumatra, Kampar, and South Kalimantan from DAP in exchange for $US 3,000,000 in cash and 47 million shares of common stock of PHI Energy Corporation, the company said

This new purchase agreement includes the previously announced 10,000,000 metric tons located at Kecamatan Kapur IX, Kabupaten Lima Puluh Kota, Propinsi Sumatera Barat, Indonesia. For reference purposes, the pre-production estimated value of the reserves is approximately $US 85,000,000 whereas current market price of steam coal GCV6,300-6,100 FOB Indonesia is approximately $US 80 per metric ton, it said.

The transaction is to close on May 31, 2011, at which time PHI Energy will deliver 47 million shares of its common stock and give two promissory notes in the amounts of $2,000,000 and $1,000,000 due and payable to DAP 45 to 150 days after closing. As part of the agreement, PHI Energy will register 12% of its then issued and outstanding common stock with the Securities and Exchange Commission for the benefits of DAP, AXNG, PHI Group and their shareholders.

Herman Koswara, Director of DAP, said, "We are pleased to contribute additional coal assets towards PHI Energy's growth strategy and believe by working together we will be better positioned to create substantial value for all parties."

Allen Wu, Chairman of PHI Energy Corp, said, "The addition of the DAP coal assets to PHI Energy's portfolio is part of our plan to secure sizable sources of coal supply to meet the demand of potential long-term off-take contracts. We are confident that this transaction will bode well for all our shareholders." (romel)