Altona Energy has announced a new joint venture (JV) agreement with two partners for its south Australian coal asset, the Arckaringa project. The company has three exploration licenses for the project.
The JV is between Altona, Chinese firm, Sino-Aus Energy Group Ltd and clean energy research company, Wintask Group Ltd.
Altona will retain a 45% control of the asset and has £3.9 million cash following new money in from JV partners. Altona’s current market cap is £7.5 million and this investment will help the company exploit the huge coal resources, equivalent to 7.8 billion barrels.
Key highlights of the agreement include
- Investment into the Arckaringa project by Wintask and Sino-Aus of AU$ 33 million.
- Initial drilling programme and Bankable Feasibility Study (“BFS”) targeted to be completed within two years.
- Wintask and Sino-Aus will provide Altona with working capital of £2 million, subject to certain conditions, through a subscription of Altona ordinary shares of 0.1p each (“Shares”).
- The product focus of the Arckaringa project will be Coal-to-Methanol, coal chemical and synthetic gas production due to market demand and reliance of proven technology.
Michael Zang, executive chairman of Altona Energy, said of the agreement that Altona was “delighted to have reached this milestone agreement with Sino-Aus and Wintask, which are both fully committed to the project. The new JV entity has been created to complete the BFS at Arckaringa, and ultimately to bring this world-class project to fruition.”
Sino-Aus released a statement explaining the company was excited by the potential offered by the JV, and that the firm was “looking forward to the forthcoming drilling programme as a key milestone in the development of the BFS.”
Qinfu Zhang, executive director of Altona and chairman of Wintask, said: “Since our initial investment in Altona nearly 12 months ago we have seen the impressive progress made” and that he was positive looking to the future as the Arckaringa project is brought closer to production.
2014 has been a somewhat challenging year for Altona energy. In January, the company terminated its JV agreement with CNOOC New Energy International, as well as its MOU with Xinjiang Hetian Duwa due to insurmountable legal issues.
However, confirmation of this new JV follows months of negotiations with the various parties. Altona said the JV “will provide [the company] with a solid foundation for increasing value over the next two years”.
Written by Sam Dodson
Read the article online at: https://www.worldcoal.com/coal/14112014/altona-energy-announces-joint-venture-agreement-1575/