†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† 28 July 2016
Altona Energy Plc
(?Altona? or the ?Company?)
Update on Joint Venture
The Board of Altona (AIM: ANR) provides the following update for shareholders:
Further to recent discussions with the South Australian Government the board of the Joint Venture company, Arckaringa Coal Chemical Joint Venture Co Pty Ltd (?JV Company?) has been informed that, as well as its existing Exploration Licences, it will need to obtain a Petroleum Exploration Licence (?PEL?) before it can commence test drilling at its Arckaringa site in South Australia. This licence, which is governed by the Petroleum and Geothermal Energy Act (2000) requires companies to conform to higher levels of regulation and is considered necessary when extracting any type of hydrocarbon product (including extraction by way of Underground Coal Gasification (?UCG?)). †
The JV Company proposes to comply with this new obligation and is reviewing the required procedures. However, it is understood that the three Exploration Licences relating to the tenements owned by Altona share a partial overlap with PELA604, an application for a PEL owned by Linc Energy Ltd, which entered into voluntary administration on 15 April 2016. †As the area covered by this PEL application is still valid despite Linc Energy being in administration, the JV Company has been informed by the South Australian Government that it may need to acquire this PEL it in order to commence any UCG activity on its tenement. The Company has made representations to the South Australian Government requesting assistance with the regulatory matter and will continue to liaise with them in this regard.
The Company advises shareholders that the acquisition of the PEL may take a number of months although the directors are not currently in a position to state definitively how long the process will take. It is understood by the JV Company that the relevant assets of Linc Energy are to be acquired by a third party whose identity is unknown. The JV Company is attempting to establish the identity of the purchaser and may then enter into negotiations to acquire the right to apply for the PEL.
During this period of inactivity, the Board of Altona has agreed with its joint venture partners, Sino-Aus Energy Group Ltd (?Sino-Aus?) and Wintask Group Limited (?Wintask?) that the Joint Venture Agreement cannot be implemented as contemplated.† The Joint Venture partners will discuss possible variations to the JV Agreement in due course to incorporate the change in timing as well as the following matters:
The Joint Venture Partners have agreed not to proceed with the second subscription by Sino-Aus for 100 million ordinary shares of Altona at the subscription price of 0.75 pence per share (to raise £750,000). The parties will endeavour to re-negotiate the terms and timing of this subscription as and when the PEL has been granted to the JV Company;
as the partners of the JV Company have agreed that the project should be postponed until the PEL is granted, the parties have agreed the return to Sino-Aus its first tranche payment of AUD$5.4 million (less what has been already spent on the project). Sino-Aus will deposit the funds into short-term investment instruments, allowing it to generate a return. Wintask will leave its first tranche payment of AUD$0.6 million with the JV Company.
Finally, the reports being prepared by mining services company, Parsons Brinckerhoff, have been completed; these being the UCG technology report and the test drilling timetable relating to the proposed bankable feasibility study. †Therefore, once the licencing issue has been resolved, and the Joint Venture terms renegotiated as required, the project will be in a position to commence.
The Company will make further announcements on all of these matters in due course.
For further information, please visit www.altonaenergy.com or contact:
|Altona Energy plc
Qinfu Zhang, Executive Chairman
Nick Lyth, Non-Executive Director
|†+44 (0)7769 906 686|
|Leander (Financial PR)
Christian Taylor- Wilkinson
|+44 (0)7795 168 157|
|Northland Capital Partners Ltd (Nomad and Broker)
Matthew Johnson / Gerry Beaney (Corporate Finance)
John Howes / Abigail Wayne (Corporate Broking)
|+44 (0)203 861 6625|
Altona is listed on the London Stock Exchange?s AIM market.† Its principal focus is on the evaluation and development of the Company?s flagship Arckaringa Project to exploit the significant coal resources contained in three exploration licences covering 2,500 sq. kms in the northern portion of the Permian Arckaringa Basin in South Australia.† The Project is designed to produce syngas products for the Australian market and export from a resource exceeding 7.8 billion tonnes of coal (1.3 billion tonnes JORC compliant).†
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