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Australia's Straits buys stake in Madagascar coal project
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21st January 2008
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ASX-listed Straits Resources has entered into a contract to acquire a 35% stake in Red Island Minerals' (RIMs) Sakoa coal prospect, in southern Madagascar, for $45-million.

RIM has an 80% interest in Madagascar Consolidated Mining, which has certain coal rights in Madagascar, and Straits could exercise its option to acquire the remaining 55% of RIM following the compilation of a resources drill out, which would take place over a period of up to 24 months.

"This acquisition in Madagascar presents an opportunity for Straits to grow a significant coalfield from a zero base, similar in many ways to Sebuku, in Indonesia, which Straits developed more than ten years ago, and is now expanding to a six million tons a year production rate," Straits CEO Milan Jerkovic said.

"The Sakoa coalfield is also situated in a prime strategic position to supply the next wave of growth markets in India, Asia, and Africa," he added.

The company indicated that, based on previous drilling and studies, the coal was estimated at more than 100 million tons, with the potential for one-billion tons, but added that this quantity was conceptual in nature, and a detailed drilling and feasibility study would be undertaken in 2008.

Straits holds a portfolio of mining investments, development projects and exploration ground for copper, gold and coal, in Australia, Indonesia, Brunei, and now Madagascar.

Edited by: Mariaan Webb

 

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