Brisbane, Nov 18, 2008 AEST (ABN Newswire) - Linc Energy Limited (ASX:LNC) announced today that recent verbal and written communications from the Xinwen Mining Group Ltd has confirmed their commitment to complete the A$1.5 billion purchase of Linc Energy's Emerald coal tenements (known as "Teresa").
Highlights:
- Xinwen Mining Group have re-emphasised their commitment to complete the A$1.5 billion purchase of the Emerald (Teresa) Coal Tenements from Linc Energy
- Emerald (Teresa) Coal Tenements have now been developed to an inferred resource of 852 million tonnes of coal in accordance with the JORC Code*, with a 200 million tonne open cut mine area identified
Linc Energy has continued to drill its Emerald tenements, in particular EPC 980, which has produced outstanding results with the coking and thermal coal deposit being upgraded to an inferred resource of 852 million tonnes in accordance with the JORC Code*, which is a significant increase above the exploration target resource(1) of 470 million tonnes* when the original sale and purchase heads of agreement was completed.
This increase in the coal tonnage at Emerald, combined with the fact that 200 million tonnes of 'open cut' minable coal has been clearly identified, is making the Emerald (Teresa) coal tenements a compelling and key coal asset purchase.
In a letter to Linc Energy, the Xinwen Mining Group Ltd have confirmed their commitment to purchase the Emerald (Teresa) Coal Tenements from Linc Energy. Mr Chen Jie (Chairman of the Xinwen subsidiary involved in the Emerald purchase) said "We are very happy with the data supplied by Linc Energy and the quality and quantity of the coal for the Emerald tenement. Despite the current financial problems with International Markets, China still needs good quality thermal and coking coal. We are working very closely with our regulators in order to complete the acquisition."
Linc Energy is aiming to have the formal sale and purchase agreement for the Emerald (Teresa) Coal Tenements executed before Christmas 2008, with the first payment of the $1.5 billion settlement to be received immediately following Australian government approvals.
Linc Energy's Chief Executive Officer, Mr Peter Bond said "The Emerald Coking Coal sale is a fantastic opportunity. The more Linc Energy drill the site, the more the Emerald coal deposit has proven to be a very prudent purchase by the Xinwen group. When Linc Energy first agreed to sell Emerald, it was on the basis of a price of approximately $3.19 per tonne in ground. With additional drilling by Linc, this has nearly doubled the size of the asset and subsequently the in-ground price has gone down to approximately $1.75 per tonne."
"On top of this, Linc Energy has now identified a 200 million tonne open cut minable area which, in my opinion, is an outstanding mine location. There simply are not many new open cut coking and thermal coal deposits available of this quality and size. In addition, with the slide of the Australian dollar, Xinwen are gaining another 30% reduction in real cost terms, making the Emerald tenements an extraordinary coking and thermal coal asset at a price much lower than what would have been paid just two or three months ago, and in reality representing what anyone will need to pay now and in the immediate future. Let's face it, good coking coal is the 'waterfront property' of the resources sector and Emerald remains a fantastic opportunity for any buyer; which probably explains why Linc Energy has received so many additional queries from other groups which are looking to pursue a potential purchase of Emerald every month".
Linc Energy is continuing to drill the Emerald tenements, with the current committed program expected to be completed over the coming weeks, with the aim of drilling the open cut minable area to a measured resource status in accordance with the JORC Code.
Note (1): In accordance with the requirements of clause 18 of the JORC Code regarding exploration, the following compulsory statement concerning exploration targets is included: "[T]he potential quantity and [quality] is conceptual in nature, that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource."
Contact
Information for Media:
Mr Peter Bond
Chief Executive Officer
Phone: +61 7 3229 0800
E-mail: pab@lincenergy.com.au
ASX Contact:
Mr Craig Ricato
Company Secretary
Phone: +61 7 3229 0800
E-mail: cr@lincenergy.com.au
Information for investors:
Ms Janelle Van de Velde
Manager, Corporate Services &
Investor Relations
Phone: +61 7 3229 0800
E-mail: jcv@lincenergy.com.au
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