BRISBANE, Australia, August 3, 2010 /PRNewswire/ -- Linc Energy Chief Executive Officer Peter Bond today announced the sale of one of his Company's non-core coal tenements in the Galilee Basin in northwest Queensland to Adani Mining Pty Ltd, a subsidiary of Adani Enterprises Ltd, for $A500 million in cash and a $2 per tonne royalty (indexed for C.P.I.) for the first twenty years of coal production, creating a total cash stream of approximately $3.0 billion. Adani Enterprises, part of the diversified Adani group, is expanding its coal mining business to meet India's huge demand for coal in its power generation operations. Adani has already obtained approval from both the Foreign Investment Review Board (FIRB) for the Galilee acquisition, and indicative approval for the transfer of the Coal Tenement from the Queensland State Government. Mr. Bond said the $A500 million up-front payment was today deposited into escrow for release to Linc Energy immediately upon receipt of the final Tenement transfer approval from the Queensland State Government. As previously announced, the Galilee tenement has a resource statement of 7.8 billion tonnes of coal in accordance with the JORC code (7.3 billion tonnes Inferred resource status and 500 million tonnes Indicated resource status). The Galilee tenement is capable of producing up to 60 million tonnes of coal per year once fully operational. The sale to Adani represents the largest single investment by an Indian company into Australia. "Linc Energy has also secured the exclusive right to negotiate with Adani on the joint development of any proposed future Underground Coal Gasification (UCG) operations within the Galilee tenement," Mr. Bond said. "This is an exciting day for Linc Energy and its shareholders. We have worked tirelessly over many months to maximise the outcome of this first coal sale for our shareholders," he said. "The royalty agreement gives Linc Energy the flexibility to monetise the royalty agreement into cash now, or hold it and receive the full benefit of 20 years of cash flow," he said. "The transaction provides shareholders with a Net Present Value (NPV) of approximately $1.5 billion, with the opportunity to earn over $3 billion in revenue over the life of the royalty, which is undoubtedly a great result for the Company," the Linc Energy CEO said. "The other significant achievement today is that we can now move quickly onto completing the Theresa (Emerald) coal sale, for which we have been receiving considerable interest," he said. Mr. Bond said he was confident that a deal for the Theresa coking (PCI) coal was not too far off. "I'm about to commence drilling additional holes at Theresa to further quantify and expand the resource and its quality, and once these drill results have been finalised we can progress quickly to a conclusion," the Linc Energy CEO said. "The value of the Galilee tenement and the strong interest in the other coal tenements held by the company are just indicators of the depth, quality and potential of Linc Energy. This sale becomes a springboard from which the Company can now aggressively pursue its commercial aspirations within Australia and other parts of the world," Mr. Bond said. Information for Media: Greg Meyer -Media Manager Phone: +61-457-761-213 E-mail: firstname.lastname@example.org Copyright (c) 2002, PR Newswire Europe http://www.prnewswire.co.uk Provider ID: 30013340 -0- Aug/03/2010 8:24 GMT
Linc Sells Galilee Coal Tenement for $3.0 Billion
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