GEO ENERGY RESOURCES In 2 Mine Deals
Written by The NextInsight Team
Wednesday, 25 September 2013 12:03
GEO ENERGY RESOURCES has just announced two related deals.
Its subsidiary, PT Mitra Nasional Pratama, has entered into a mining services contract with PT Parisma Jaya Abadi (PJA).
Another subsidiary, Geo Coal International, entered into a coal mining cooperation agreement with PJA, which holds mining business permits for 5,000 hectares of land in the Kedung Murung and Lebak Mantan Villages, Kota Bangun and Muara Wis District, Kutai Kartanegara Regency, East Kalimantan Province.
Under the mining services contract, PT Mitra Nasional Pratama shall provide overburden removal in a specified work block of approximately 150 hectares within PJA's concession area.
PT Mitra Nasional Pratama shall receive a service fee of US$2.50 (excluding value added tax) per bank cubic metre for overburden removal.
Under the mining agreement, PJA and Geo Coal International will cooperate to produce coal in the same 150-ha work block.
PJA has agreed to sell and deliver the coal produced from the work block exclusively to Geo Coal International.
PJA has undertaken exploratory activities and guaranteed that the potential coal contained in the work block is approximately 420,000 metric tonnes of coal with calorific value in excess of 6,800kcal/kg (GAR).
The exploration results were made available to PT Mitra Nasional Pratama, which has commenced drilling and boring works at the work block to ascertain the coal deposit.
In the event that the volume of coal produced from the work block amounts to less than 420,000 metric tonnes, PJA will assign to Geo Coal International additional work blocks until the volume of coal produced reaches 420,000 metric tonnes.
Geo Coal International shall make an upfront payment of US$2.94 million to PJA within 14 days from Sept 24, the date of the Mining Cooperation Agreement.
The mining services contract and mining cooperation agreement are expected to have a positive impact on the net tangible assets per share and earnings per share of Geo Energy Resources for the current financial year ending 31 December 2013.