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Guildford Coal to sell Australian assets

World Coal,

Guildford Coal has reached an agreement with Sino Construction Limited to enter into a term sheet to acquire all of Guildford’s Australian coal assets.

The key terms of the offer are as follows:

Coal assets

Sino will acquire all of Guildford’s Australian coal assets, being the Clyde Park Project, Pentland Project, Springsure Project, Hughenden Project, Sunrise Project, Monto Project, Sierra Project and Kolan Project.

Purchase price

The purchase price will consist of:

  • US$ 25 million, payable by way of a non-interest bearing convertible promissory note which matures six months after issue.
  • A royalty paid to Guildford, which is equal to US$ 0.35 per ton of coal sold from all of Guildford’s Australian coal assets. The royalty will be payable for 5 years from the date the first Australian coal asset commences commercial production.

Management agreement

Guildford will be appointed as sole and exclusive manager of the Australian coal assets and will have a first and last right to be appointed as the contract miner for each asset that moves into commercial production. A management fee payable to Guildford for providing these services will be agreed with Sino.

Adapted from press release by Katie Woodward

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