Singapore?s Magnus targets coal production before Feb 2006

Singapore Exchange-listed firm Magnus Energy Group Ltd said Tuesday its wholly-owned subsidiary Antig Investments Pte Ltd had entered into a third supplemental agreement to modify certain terms and conditions in the sale and purchase agreement (SPA) to acquire 72 percent shares of PT Deefu Chemical Indonesia.

Under the SPA, signed last November, Antig agreed to pay US$18 million to acquire Deefu, which owns 95 percent shares of PT Batubara Selaras Sapta (BSS), a third generation coal contract of work (CCoW) holder with concession in Pasir regency, East Kalimantan.

Magnus said the new terms affirmed that the concession should produce between 10,000 and 30,000 tons of coal per month, with a quality satisfactory to Antig, before end of February next year, the cut-off date of the SPA.

Magnus also said Antig had agreed to disburse loan of US$2 million in aggregate to finance the preliminary extraction of coal at the concession. However, the loan should be treated as part of BSS?s working capital.

Magnus earlier said one of the concession prospect areas was estimated to contain around 500 million tons of inferred and indicated coal reserves with calorific value ranged from 6000 to 7000 Kcal/kg. (Robert)