C @Limited enters agreement to acquire eight Mongolian coal licenses

Friday, 28 Oct 2011

Perth based C@ Limited will acquire eight highly prospective Mongolian coal licenses for USD 7.8 million after it signed a conditional Share Sale Agreement with Peabody Winsway Resources to acquire all of the issued capital in its subsidiary BDBL.

Importantly, the eight coal licenses cover 625 square kilometres in a major emerging coal province. The region is characterized by a number of recent major black coal discoveries on the doorstep of the expanding Chinese steel and energy markets.

A number of the licenses are close to existing producing assets and infrastructure with close proximity to major energy markets like China and Russia, which make the economics of this project very favorable.

Four of the licenses are located in the Ongi River Basin in the Ovorhangay province and four are located in the South Gobi Basin in the South Gobi province. As part of its technical due diligence on these licenses, C @ undertook an exploration drilling program which intersected three coal seams on the Ovorhangay licenses. Initial raw coal quality tests at both Mongolian and Australian laboratories have confirmed high quality coking properties both near surface and at moderate depth likely to be enhanced by washing.

All of the licenses have had limited exploration but offer considerable potential. C @ will now undertake a capital raising of up to AUD 28 million including a USD 3 million priority issue to eligible shareholders.

Upon completion of the acquisition, C @ will immediately undertakes Phase II of its exploration program which will include geophysics and a substantial drilling program. Priority will be given to the Teeg licence located in Ovorhangay which intersected two significant coal seams during the company Phase I exploration program.

C @ will undertake a geophysical survey to identify the potential black coal extensions concealed on the licence to support key targets of the drilling program.

(sourced from ProactiveInvestors)