Wildhorse Energy Ltd said that it is yet to finalise the sale of its underground coal gasification (UCG) assets to Linc Energy Ltd. Wildhorse has now extended the heads of agreement with Linc, although it said there is a risk that the sale will not be finalised.
The company signed a binding heads of agreement back in February to sell its underground coal gasification assets to Linc Energy for AU$ 4.04 million, a move it said it was making to fund its operations as it didn't have enough money to meet its minimum committed administrative and exploration expenditure for at least 12 months.
Wildhorse Energy, the developer of underground coal gasification and uranium projects in Hungary and central Europe, said Monday that the heads of agreement with Linc Energy has been extended and is now due to expire on 21 July.
It said the sale of the assets has not yet proceeded to a formal agreement stage or been finalised, and said that there is a risk that the sale will never be finalised.
"Until the company is certain that the sale to Linc Energy will proceed and the project is funded, the company is now reducing all costs on site. If the sale to Linc Energy does not proceed, the licence will not be current and will be at risk of termination," the company said in a statement.
Earlier this month, Wildhorse Energy said it will raise up to AU$ 1.4 million before costs in a rights issue, using the money to develop existing products and identify and evaluate new uranium and other resource projects. It said it is offering shareholders one share for every two shares that they currently hold, at AU$ 0.007/share, meaning it could issue up to about 205 million new shares. The offer is non-renounceable, meaning the rights cannot be transferred or sold.
Wildhorse remains a keen advocate of UCG, saying that the “Application of UCG technology considerably reduces the environmental impact of harnessing the energy value of coal. Disruption to the surface is also significantly decreased in comparison to disruption caused by traditional extraction methods like opencast or shaft mining. These factors are not only favourable to local communities but also to governments aiming to maximise a country’s energy potential. UCG technology can also be applied to coal assets that would otherwise be unprofitable or too complicated to extract through traditional mining methods. UCG therefore has the potential to unlock the value of Europe’s substantial undeveloped coal resources.”
Edited from various sources by Sam Dodson
Read the article online at: https://www.worldcoal.com/cbm/03072014/sale_of_ucg_assets_could_fall_through_cbm64/