Victory West to acquire South East Asia Energy Resources
Friday, September 9 2011 - 03:29 AM WIB
Energy Resources, a special purpose company registered in Singapore, has the ability to secure majority equity stakes in a number of Indonesian thermal and coking coal assets.
Victory West Metals expects the acquisition will assist the company in achieving its target to acquire 50 to 100 Mt of inferred JORC compliant resource, and production of 2.4 million tonnes per annum within the next 12 to 24 months.
Victory West Metals and Energy Resources have agreed that the share component of the first tranche of the consideration will be escrowed from the date of the issue of those shares until the later of July 1, 2012 or an achievement of an annualized production rate of 1.2 million tonnes of thermal coal.
Under the deal, Victory West will acquire 100 percent of Energy Resources for a total consideration of up to 330 million fully paid Victory West shares, 33 million Victory West options (exercise price, 30c), and cash of A$750,000.
The acquisition of Energy Resources will include an agreed set of warranties that will give rights to Energy Resources to an 85 percent interest in the BEK Project and a 100 percent of the coal marketing rights for the BEK Project.
Energy Resources must demonstrate that the BEK Project will have a mineralization of not less than 6 metric tons of high grading thermal coal with calorific value of not less than 5,000 Kcal/kg.
It was also agreed that Energy Resources has majority right to nine other coal concessions which host high grading thermal coal with calorific value of not less than 5,000 Kcal/kg and will seek to secure 100 percent of the coal marketing rights for these concessions.
The acquisition of Energy Resources was facilitated by Asia Energy Group Singapore (AEG), a global provider of mining services, with particular skills and experience in coal project assessment and acquisitions in Indonesia. (romel)