29/09/2008 - 12:02

Sam's Seafood turns to coal sector

29/09/2008 - 12:02

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Subiaco-based seafood processor Sam's Seafood Holdings Ltd has branched out into the coal sector after agreeing to acquire a company that holds a majority interest in an Indonesian coal project.

Sam's Seafood turns to coal sector

Subiaco-based seafood processor Sam's Seafood Holdings Ltd has branched out into the coal sector after agreeing to acquire a company that holds a majority interest in an Indonesian coal project.

 

Below is part of the full announcement:

 

Highlights

- Sam's Seafood Holdings Limited will pay US$300,000 and issue 100 million ordinary shares, 50 million Class A Performance Shares, 50 million Class B Performance Shares and 50 million Class C Performance Shares to acquire a 100% interest in Triumph West Pty Ltd ("Triumph").

- Triumph has the rights to 80% of the shares in two Indonesian PMA companies, which owns the mining rights to a coal concession near Batulicin in South Kalimantan Province of the Republic of Indonesia under mining authorities known as Kuasa Pertambangan (KP).

- This concession covers an area previously explored by PT. Arutmin Indonesia (BHP Minerals) and in the near vicinity of three exploitation/production licenses currently being mined by PT Arutmin Indonesia (now PT Bumi Resources, Tbk).

- It is proposed that initial activity will be concentrated on the exploration and development of underground coal resources. The intention is to secure a long term off-take agreement from a partner that will undertake all exploration and development activities in return for future delivery of coal.

1. ACQUISITION OF TRIUMPH WEST PTY LTD

Sam's Seafood Holdings Limited (Company) has entered into a share sale agreement with the shareholders of Triumph West Pty Ltd (Triumph) to acquire 100% of their shares in Triumph in consideration for a cash payment of US$300,000 and the issue of 100 million ordinary shares, 50 million Class A Performance Shares, 50 million Class B Performance Shares and 50 million Class C Performance Shares.

Triumph has secured the right to acquire an 80% interest in two Indonesia PMA companies that, in turn, have the rights to a coal project in South Kalimantan. Details on the coal project are set out below:

1.1 Overview of the Coal Project

Overview and Location
Triumph, through the Indonesian PMA companies, has the exploration rights for underground coal deposits covered by a KP in South Kalimantan. The granted exploration KP, in the name of PT Roda Niaga, covers an area totalling 6,412 hectares and forms part of a relinquished portion of the PT Arutmin contract of work that lies immediately South-Southwest of the Mereh block in the Batulicin area of South Kalimantan. This KP covers the down dip continuation of the coal seams that are currently being mined in the Saring and Mereh block deposits by PT Arutmin.

Based on previous exploration results, Triumph considers that the potential tonnage of coal in the underground seams lying between the Ata and Mereh deposits is significant. However, insufficient work has been completed to date to enable a JORC compliant resource estimate to be determined.

The Company intends to engage an Australian geologist and mining engineer to review the previous exploration data to form a view on the resource potential and determine what additional work may be required to release a JORC compliant resource estimate.

Infrastructure and Mine Development

The exploration area has direct access via a haulage road to a jetty and port facilities. The existing road quality is good, being previously constructed for logging activities of a Korean timber company, and recently improved for mining activities. The roads are used and maintained as coal hauling roads of PT. Arutmin, Indonesia and other small mining companies. This ex-logging road is now under the control of the provincial government.

There are many barge loading ports operating at the coastal area, owned and operated by Indonesian private companies, including a few ports exclusively dedicated to support PT. Arutmin's trans-shipment activities.

There are also two coal terminals accessible by max. 180,000 DWT coal carriers located at North and South of Pulau Laut Island. The North Pulau Laut Coal Terminal (NPLCT) is exclusively operated by PT. Arutmin. The other coal miners can use South Pulau Laut Coal Terminal (or Indonesian Bulk Terminal (IBT)) which is owned and operated by an Indonesian private company to ship large quantities of coal to the export market.

However, Southeast Asian and domestic markets are usually serviced by 3,500 to 10,000 DWT tug and barges, so they do not need to use such NPLCT or IBT. Many offshore points distanced only about 20 km to 40 km from barge loading ports are often used to trans-ship coal from barges to geared vessels.

Additional Concession Areas

In addition to the granted KP (PT Roda Niaga) referred to above, Triumph is confident that it will secure two (2) further additional concessions within the same area that will enhance the current project. These two (2) concessions (Harun 1 & 2), total 13,712 hectares.

General

A report from Cicip Hadisucipto, an Indonesian Geologist/Coal mining Economist on the underground coal mining prospects in the Batulicin area details the potential for underground coal mining prospects, excerpts from which are described below:

The Batulicin Area describes an area of deposits which surround the Town of Batulicin, instead of individual deposits within the area. This area is about 36 km wide and 30 km long.

Preliminary reports indicate that coal seams in the study area occur in the middle sequence of the Ecoene Tanjung Formation, having a strike direction parallel to the Meratus Mountain Range. The Tanjung Formation is unconformably deposited over the Pre-Tertiary Basement, having a total thickness of up to 250m, and consisting of terrestrial basal conglomerates overlain by coal seams and marine mudstone.

In the western PT. Arutmin concession (ATA Block), there are up to 4 coal seams which have been mapped within the T2 unit, but only the basal seam has attained economic thickness, the Sela Seam. In the middle and eastern part of study area, PT. Arutmin reported only two coal seams, higher ash content and lower calorific value compared to the above mentioned western block.

From the structural geology point of view, coal seams in the study area present as a series of anticlines-synclines, except monocline in the most west and eastern parts, close to the basement high. From west to east, there is Cantung Syncline on the west, Saring Anticline on the middle and Mereh Syncline in the east. The Batulicin Fault divides the study area into north and south regions.

Management

As part of the transaction, the Company has agreed to immediately appoint Mr Dennis Thomas to its board of directors. A short bio on Mr Thomas is set out below:

Mr Dennis Thomas is a Consulting Mining Engineer and Company Director with 40 years experience in the international mining industry. He has worked worldwide on project development in South and North America, South, West and East Africa, Iran and the Middle East, Russia, UK, Mongolia, Bangladesh and South East Asian countries of the Philippines, Indonesia, Cambodia, Myanmar and Vietnam.

He is a graduate of Camborne School of Mines, UK, holding a First Class A.C.S.M. He is also a Fellow of the Institute of Materials, Mining & Metallurgy and the Geological Society of London, a Chartered Engineer, Registered European Engineer and a member of the London based Association of Mining Analysts.

For the past 30 years, he has been, as Principal of Thomas Mining Associates, a leading figure in the field of international mining recruitment and personnel consultancy, working in both the developed and developing world and covering all types of mining.

Since the mid 1980s, he has become deeply involved with the sourcing and development of new projects, especially in the Third World, in particular Africa, South America, Asia and the countries of the former Soviet Union. He has travelled extensively in these regions during the course of this work, being responsible for generation, evaluation and establishment of new exploration and mining projects for development and joint venturing. These include the exploration and joint venturing of significant new project in Russia, Peru, Brazil, Argentina, East Africa, West Africa and various countries of Asia, including Indonesia, Bangladesh, the Philippines and Cambodia and covering commodities such as coal (opencast and underground), precious and base metals and a variety of industrial minerals.

Mr Thomas has served as Chief Executive Officer, Executive and Non-Executive Director of a number of UK, North American and Far Eastern public and private resources companies. In addition, the Company will be engaging Indian West Pty Ltd to provide additional consultancy services to the Company that will involve coordination of the ground team in Indonesia.


EXISTING SEAFOOD ASSETS
The Board continues to evaluate the Company's existing seafood assets and the viability of developing these assets into an economic business.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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