Shares in Indo Mines have soared after the company announced it had acquired unlisted company Fireside Resources and its various Indonesian resource assets including a coal project scheduled to begin production in April.
Shares in Indo Mines have soared after the company announced it had acquired unlisted company Fireside Resources and its various Indonesian resource assets including a coal project scheduled to begin production in April.
And as part of the deal, Moly Mines chief executive Derek Fisher and Murchison Metals executive chairman Paul Kopejtka will join the company's board.
After returning from a trading halt, shares in Indo Mines were up 9.5 cents, or 26.03 per cent, to 46 cents at 1645AEST after hitting an earlier peak of 50 cents.
Indo said Fireside, which held rights to the BBPK coal project and several other coal, iron sands and nickel assets, had negotiated the acquisition of a bankable feasibility study on the BBPK project that was recently completed by a 'major mining group'.
As such, Fireside is required to achieve a minimum monthly output of 25,000 tonnes of nominal 6,500 kcal thermal coal by May 2010.
The acquisition, which is subject to shareholder approval, will include the issue to Fireside shareholders of 20 million Indo Mines shares at settlement, with further ordinary shares to be issued upon achievement of milestones relating to both the coal assets and financing of the Jogjakarta Pig Iron Project.
Indo Mines intends to issue 12 million shares to fund the initial development costs of the BBPK Project to move into production and to provide working capital.
StoneBridge Group will manage the placement to sophisticated investors.
Indo Mines managing director Phil Welten said the proposed transaction will give Indo Mines the opportunity to develop strategic coal assets to take advantage of the current high thermal coal price that together with the Jogjakarta Pig Iron Project will help to grow the company's presence in Indonesia.
"We are also pleased to have two very capable industry leaders joining the board to support the ongoing development of the Indonesian assets bringing additional technical expertise as well as a proven track record in funding large scale resource projects through the development phase," he said in a statement.
Full announcement below:
ACQUISITION OF SIGNIFICANT COAL ASSETS IN INDONESIA AND STRENGTHENING OF INDO MINES BOARD
Highlights:
- Acquisition of rights to an advanced coal project in well established South
Kalimantan region of Indonesia.
- Production from trial mining activities at the BBPK Project is targeted to
commence by April 2010 thereby taking advantage of the current high thermal coal
price
- Bankable Feasibility Study completed on the project in 2008 by a major mining
group
- Highly respected mining executives Dr Derek Fisher and Mr Paul Kopejtka to join
the Indo Mines Board
Indo Mines Limited (ASX: IDO) is pleased to announce that it has entered into a conditional
agreement ("Agreement") to acquire Fireside Resources Ltd ("Fireside"), an unlisted Australian public company, which holds the rights to an advanced coal project, the BBPK Coal Project ("BBPK Project"), which is targeting to commence production by April 2010. Fireside also holds a number of other resource assets in the Republic of Indonesia.
A Bankable Feasibility Study was recently completed by a major mining group on the BBPK
Project and Fireside has negotiated the acquisition of the study which will assist in the
development and operation of the mine. Fireside is required to achieve a minimum monthly
output of 25,000 tonnes of nominal 6,500 kcal (ADB) thermal coal by May 2010.
As part of the transaction, the Board of Indo Mines will be strengthened with the appointment of Dr Derek Fisher (Managing Director and CEO of Moly Mines Limited (ASX: MOL)) and Mr Paul Kopejtka (Executive Chairman of Murchison Metals Limited (ASX: MMX)), both of whom have demonstrated project development and large scale capital raising experience.
The proposed acquisition will create a diversified company with:
- a significant presence in the well established coal region of Kalimantan, with the ability to
take advantage of strengthening thermal coal prices by targeting near term production;
- a portfolio of quality coal, iron sands and nickel projects in Indonesia, diversifying the
project development and resource risk;
- an enhanced and highly credentialed Board with proven capability to identify and fund
substantial mining projects; and
- operational synergies including access to a larger pool of in-country technical,
operational and administrative personnel.
Managing Director of Indo Mines, Mr Phil Welten, said "The proposed transaction will give Indo Mines the opportunity to develop strategic coal assets which are targeting production to take advantage of the current high thermal coal price that together with the Jogjakarta Pig Iron Project will help to grow the Company's presence in Indonesia.
We are also pleased to have two very capable industry leaders joining the board to support the ongoing development of the Indonesian assets bringing additional technical expertise as well as a proven track record in funding large scale resource projects through the development phase".
The commercial terms of the acquisition, which is subject to approval by Indo Mines
shareholders, include the issue to Fireside shareholders of 20 million Indo Mines shares at
settlement, with further ordinary shares to be issued upon achievement of milestones relating to both the coal assets and financing of the Jogjakarta Pig Iron Project ("the Project") (see
Commercial Terms section for further details).
Indo Mines intends to issue 12 million shares to fund the initial development costs of the BBPK Project to move into production and to provide working capital. StoneBridge Group will manage the placement to sophisticated investors.
