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Tigers Realm Coal takes full ownership of Amaan North

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World Coal,

Tigers Realm Coal Ltd has moved to 100% ownership of the Amaam North project, including Project F which is currently in production.

This transaction is consistent with the Heads of Agreement (HOAs) between TIG and its joint venture partners, which was announced on 29 June 2016.

As well as moving TIG to full ownership of the Amaam North project, this transaction improves the Amaam North project’s value and fundability, and simplifies ongoing corporate governance and approval processes for the Amaam project.

The transactions have been completed on terms and conditions consistent with those announced on 29 June 2016. At that time, TIG signed two binding Heads of Agreement (HOAs) with its joint venture partners – one in relation to the Amaam North roject, and the other in relation to the Amaam project.

The key terms and conditions of the transaction are as follows:

  • TIG acquired 20% of the Amaam North project (including Project F) from its joint venture partners and therefore now owns 100% of Amaam North project.
  • TIG’s joint venture partners will receive consideration for the Amaam North of up to US$25 million, to be paid within 20 years in annual payments calculated as a percentage of gross sales revenue from coal sales from the Amaam North Project, on the following terms:
  1. Subject to certain rights of TIG to defer payment of any annual payment, annual payments are 1.5% of gross sales revenues for the first five years, 2.25% of gross sales revenues for the three years following, and 3% of gross sales revenues thereafter.
  2. Under certain circumstances, TIG may elect to pay up to 50% of the amount due for any year in kind by issue of TIG shares.
  3. Irrespective of the amount paid, annual payments will cease after 2037.
  • The Shareholders Agreement for the Amaam project has been amended to simplify the processes governing the decision to develop and mine coal at the Amaam project and streamline corporate reporting and board processes, work program approval and other management processes.

The total consideration for the transaction described above is limited to US$25 million and payable within no more than 20 years. This represents a marked reduction in comparison with 5% of total project gross sales revenues that would be payable under the previous structure.

TIG extends its appreciation to its joint venture partners for working with TIG on this transaction to adapt the terms and conditions to the changed economic circumstances since the original agreements were reached in 2010.

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