Enters Joint Venture Discussions To Develop Atrum's 100% Owned Panorama Anthracite Project With Kuro Coal
Perth, May 1, 2014 AEST (ABN Newswire) - Atrum Coal NL ("Atrum" or the "Company") (
ASX:ATU) (ATRCF:OTCMKTS) is pleased to announce that the Company has entered into joint venture discussions with Kuro Coal Limited (Kuro) to develop its 100% owned Panorama project (Panorama).
Kuro Coal is the spinout company of Atrum Coal and will be listed via IPO - ticker code KCO.
Commenting on the arrangement, Executive Director Mr Russell Moran said:
"A joint venture at Panorama is a win-win for Atrum and Kuro. The deal creates co-development and co-marketing opportunities that will benefit both companies."
Completion of a formal joint venture agreement is anticipated in the next week. Once signed, Atrum will be in a position to finalise its ATO demerger relief application and complete the IPO and ASX listing of Kuro. Further updates and a 'Notice of Meeting' will be dispatched to shareholders in the coming weeks.
PANORAMA ANTHRACITE PROJECT - JOINT VENTURE
Atrum and its wholly owned subsidiary Kuro Coal, are currently finalising a joint venture agreement for the development of Atrum's 100% owned Panorama anthracite project located approximately 20km west of Atrum's flagship Groundhog Anthracite Project (Groundhog), in British Columbia, Canada.
Panorama consists of two granted coal licences totalling 850 hectares of contiguous tenure that is the subject of the proposed joint venture.
The Panorama area is the only other known outcrop of the Groundhog Coalfield (where Atrum's Groundhog Project is located) and is believed to be prospective for high grade anthracite. Unlike the spin-out Atrum's Naskeena, Peace River and Bowron River assets, the Panorama coal licences are part of the greater Groundhog anthracite coal basin, and as such, the Atrum Board believes that a joint venture rather than spin-out of the Panorama asset is appropriate. This will enable Atrum to retain influence over the exploration and development of this potentially high grade and ultra-high grade anthracite asset.
The Atrum Board further believes that marketing of any products produced at Panorama should be a collaborative effort between Atrum and Kuro, to enable the companies to jointly maximise returns.
There are a number of benefits to the joint venture deal, for Atrum, Kuro and the local area:
- Atrum management can focus entirely on developing its flagship Groundhog project with no coal licence rentals or expenditure commitments for Panorama, Naskeena, Peace River or Bowron river licences;
- There are immediate drill-ready targets at Panorama, which were not planned for near or medium term exploration given the focus on Groundhog; the joint venture creates more potential upside for Atrum shareholders that would not have been possible had Panorama remained wholly-owned by Atrum.;
- Subject to exploration success, Kuro can share in the costs associated with future port, power and road upgrades from the Groundhog and Panorama sites through to Stewart, and potentially, rail line development. The addition of a second infrastructure user reduces financing risk for potential financiers.
- The potential for a single wash plant site for coal washing of both Atrum and Kuro anthracite could reduce wash plant costs and facilitate blending and co-marketing arrangements to maximise product pricing; and
- The joint venture translates to significantly more employment opportunities for local communities in the area.
The joint venture is subject to due diligence and agreement of final terms and documentation.
About Atrum Coal Limited
Atrum Coal Limited (ASX:ATU) is a metallurgical coal developer. The Company flagship asset is the 100%-owned Elan Hard Coking Coal Project in southern Alberta, Canada. Elan hosts large-scale, shallow, thick, hard coking coal (HCC) deposits with a current JORC Resource Estimate of 298 Mt (70 Mt Indicated and 228 Mt Inferred). Comprehensive quality testing of Elan South coal on samples from the 2018 exploration program, combined with review of substantial historical testwork data for the broader Elan Project, has confirmed Tier 1 HCC quality.
The initial focus for development is the Elan South area, which is located approximately 13 km from an existing rail line with significant excess capacity, providing direct rail access to export terminals in Vancouver and Prince Rupert. Elan South shares its southern boundary with Riversdale Resources Grassy Mountain Project, which is in the final permitting stage for a 4.5 Mtpa open-cut HCC operation. Around 30km to the west, Teck Resources operates five mines (the Elk Valley complex) producing approximately 25 Mtpa of premium HCC for the seaborne market.
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