Jun 20 2006
Xstrata Coal today announced it has signed a Heads of Agreement with Caledon Resources plc (Caledon) for the partial sale of its Cook Colliery for a cash payment of A$45.6m.
Located in Central Queensland’s Bowen Basin, Cook Colliery produces hard coking, semi-soft and thermal coal products primarily for the export market. The colliery’s operating company, Cook Resource Mining Pty Ltd (CRM), is owned by Xstrata (95%) and Tokyo Boeki (5%).
“Xstrata Coal is pleased to announce the partial sale of its holdings in the Cook Colliery and associated leases to Caledon Resources,” said Xstrata Coal Chief Executive, Peter Coates.
“We are now focusing on implementing an exploration programme of the available resources in the Northern region of the site.”
Under the terms of the Heads of Agreement:
- Caledon will be granted a sub-lease to mine the Southern region and accepts responsibility for the rehabilitation of the area.
- CRM retains exclusive ownership of the Northern Region for exploration.
- CRM grants a lease over the Coal Preparation Plant (CPP) to Caledon for its operation and maintenance.
- CRM will have the ongoing right to use the CPP in the event of commercial production of coal from the Northern Resource. Operation costs will be shared with Caledon based on ROM.
Xstrata has agreed to enter into a four month exclusive dealing period to enable Caledon to finalise its shareholder approval and funding. A break fee of A$2.5m has been agreed.
The total sale amount is to be paid on completion of the Asset Purchase Agreement, subject to the fulfilment of certain conditions precedent including the approval of the Xstrata and Caledon Boards.