21/01/2008 - 12:42

Straits pays $51m for coal project stake

21/01/2008 - 12:42

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Perth-based Straits Resources Ltd has acquired a significant stake in a Madagascar coal project for a total of US$45 million ($51.35 million).

Straits pays $51m for coal project stake

Perth-based Straits Resources Ltd has acquired a significant stake in a Madagascar coal project for a total of US$45 million ($51.35 million).

A sale and purchase agreement has been finalised with Red Island Minerals to acquire an interest in the coal tenements in the Sakoa area of south-west Madagascar, off the Eastern coast of Africa.

RIM owns an 80 per cent interest in Madagascar Consolidated Mining which has certain coal rights in Madagascar.

Under the agreement, Straits will initially acquire a 35 per cent shareholding in RIM and will have the option to purchase the balance of the issued capital in RIM within two years.

The first 35 per cent will be satisfied by the payment of US$5 million ($5.7 million) for a resource drill out and completion of a feasibility study and US$40 million ($45.6 million) worth of Straits shares and cash.

Straits chief executive Milan Jerkovic said the Madagascar acquisition presented an excellent opportunity for Straits to grow a significant coal field from a zero base, similar in many ways to its Sebuku project in Indonesia which Straits first developed more than ten years ago and which is now expanding to a 6 Mtpa production rate, on the back of a substantial resource base.

Straits currently runs the Whim Creek Copper operation in Western Australia, and has other mining interests in New South Wales, Indonesia and Brunei.

 

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