WMN terminates acquisition agreements
Tuesday, June 21 2016 - 02:16 AM WIB
ASX-listed Western Mining Network Limited (WMN) said it has elected to terminate the option agreement to acquire 75 percent of the shares in PT Mekongga Sejahtera, which owns the Tamboli graphite project, Kolaka, Southeast Sulawesi.
The company said in a statement Tuesday it has also terminated the option agreement to acquire 99 percent of the shares in PT Eagle Rich Nusantara. The company said has sent letters of termination to the relevant counterparties.
As previously announced, the company recently engaged Geoservices Laboratory to conduct the necessary re-assay testwork applying the standard acid leach/roast/LECO method to assess the Total Graphitic Content (TGC) on samples extracted from Tamboli. ?The results of Geoservices? analysis indicated that the TGC was not significant and not of a grade to justify further exploration by the company,? WMN said in the statement. The company added that the TGC testwork has been confirmed by a further independent analysis conducted by Intertek Laboratory in Jakarta.
?Given the disappointing results, the board has elected not to complete the option agreements to acquire interests in PT Mekongga Sejahtera and PT Eagle Rich Nusantara,? WMN said.
Elsewhere, the company said it has elected to terminate the Conditional Sale and Purchase Agreement to acquire 100 percent of the shares in PT Grafindo Nusantara, which owns the Balai Sebut Graphite Project and an additional exploration asset covering 10,000ha in Jangkang district West Kalimantan.
Over the past 6 months, the company has conducted due diligence and third party testwork in order to assess the commercial attractiveness of the Balai Sebut Graphite Project. ?The due diligence and testwork program did not yield results, which would justify the company continuing with the acquisition of PT Grafindo Nusantara. Consequently, the company has today sent a letter of termination to the relevant counterparties.?
On 25 July 2014, the Company through its wholly owned subsidiary PT. WMNI, completed the acquisition of 75% of the shares in PT. Persada Bumi Rawas (PT.PBR). The Company has a Foreign Principle License from the Indonesia Investment Coordinating Board approving the ownership.
PT. PBR is the 100% owner of IUP Exploration No.540/307.19/Distamben dated 12 August 2009 and issued by Regent of Buol (?Persada Gold Project?). The Persada Gold Project is located northeast of Palu in Central Sulawesi, between Toli-toli and Buol. It is approximately 50km east of Toli-toli and covers 5,000ha.
Due to the Company?s recent focus on the Tamboli Project, the Company has dedicated limited resources and capital to the Persada Gold Project. However, given the decision to terminate the option to acquire the Tamboli Project, the Company is presently formulating a work plan for the Persada Gold Project. The Company will provide shareholders with detail of the proposed work plan and budget in due course.
Furthermore, in a company update, WMN said that over the past fortnight, the board has engaged with the largest outstanding creditors of the company with a view to agreeing settlement terms. These discussions are ongoing and the company will advise shareholders once final settlement terms have been achieved.
?The company is also presently considering capital raising alternatives to repair the balance sheet,? WMN said.
Editing by Reiner Simanjuntak