Pan Asia sells Indonesia project stake to Singapore firm
PERTH (miningweekly.com) – ASX-listed Pan Asia has agreed to sell its 75% interest in the PT Transcoal Minergy (TCM) coal project, in Indonesia, to Singapore’s Universal Coal Resources for S$30-million in shares.
The two companies have signed a heads of agreement which would see Universal acquire ownership of Pan Asia’s Singapore subsidiary, Innovation West Mantewe, which owns the TCM project.
The transaction would be subject to Universal conducting an initial public offering, listing on the Singapore exchange and raising S$20-million through the offering.
Pan Asia CEO Alan Hopkins said that the sales agreement provided a substantial vale add to the current assets of the company, as well as an avenue for raising the $20-million equity component required to develop the TCM project without significantly diluting Pan Asia shareholders.
Hopkins said that the company would assist Universal in its endeavours.
The TCM project had a mineral resource estimate of about 129.16-million tonnes, and was expected to deliver 1.5-million tonnes a year of saleable coal product over a 30-year mine life.
A 2012 feasibility study estimated that the base case production would require capital expenditure of $179-million, excluding mine closure and ongoing maintenance costs. The feasibility study estimated that the project would have a net present value of some $124-million, and an internal rate of return of 20.85%.
Prior to the completion of the transaction, Universal would assume all responsibilities for the TCM project, including expenses of obtaining all statutory approvals, all relevant contracts and any value-added works.
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