WMN to Acquire 4 thermal coal tenements

By Romel S. Gurky

ASX-listed Western Manganese Limited (WMN) recently announced it has on November 14, 2012 entered into a Master Agreement to acquire up to 100% shares of PT Pratama Energy Alam Tujuh (PEAT), PT Adi Mecha Kontekindo (AMK), PT Samboja Perdana Agung (SPA) and PT LB Prima Coal (LBPC), four thermal coal tenements with a combined area of 5,000 hectares in Penajam Paser Utara, East Kalimantan.

The company said that PEAT, AMK, and SPA hold exploration licenses located within the Pamal and Pulau Balang geological formation with bituminous coal at potentially high calorific values, while LBPC holds a production license, located within the Balikpapan geological formation with sub-bituminous coal at potentially economic calorific values.

The Penajam Paser Utama Project comprises of four close mining business areas located approximately 35km northwest in a direct line from Balikpapan in the province of East Kalimantan.

WMN stated it has locked in a valuation significantly below market terms paid in comparable acquisitions, in which a maximum of 10,000,000 WMN Shares to be issued on the completion of the transaction (only if WMN acquires all four tenements) and an additional US$0.20 per ton paid upon proving coal reserves delineated and defined in accordance with the JORC code.

Under the deal structure, WMN has 90 days exclusivity and the rights to conduct early exploration and due diligence to decide whether the tenements are attractive as having the coal resources and reserves potential it desires.

Editing by Er Audy Zandri