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Challenger sells Barito coal project

World Coal,

Challenger Deep Resources Corporation has entered into a binding Letter of Intent (LOI) for the sale of its Barito coal project in Central Kalimantan, Indonesia.

Barito coal project

Under the terms of the LOI, the purchaser, a private Australian company, will buy all outstanding shares of PT Bestindo Energy, a wholly owned subsidiary of Challenger, which holds the rights to the Barito coal project.

Payment division

The purchase price under the LOI is US$ 2 million. This payment will be divided into the following:

  • US$ 50 000 on signing of the LOI
  • US$ 100 000 on signing the formal Conditional Share Purchase and Sale Agreement (CSP&SA)
  • US$ 150,000 within 60 days of signing the CSP&SA
  • US$ 500 000 on preliminary forestry permit approval for the project
  • US$ 1.2 million on final approval of the forestry permit and commencement of commercial production.

Coal royalties

Challenger will also be granted a royalty of US$ 2/t on all coal produced from the project lands and from lands within a 2 km area of interest surrounding the project lands in which the purchaser may acquire further coal rights.

The Australian purchaser has assumed responsibility for all ongoing expenses of PT Bestindo Energy and the Barito project, effective immediately.

Tabang coal project

Challenger will also continue its efforts to finance or to find a joint venture partner for its Tabang coal project located in East Kalimantan, Indonesia.

Adapted from press release by Katie Woodward

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