Our other projects namely Hodgson Vale and Ashford had minimal funds allocated during the year, since the key projects of Ferndale, Vickery South and Oaklands required all available resources in both management time and funding. As a result, your board decided to arrange to divest these assets into another vehicle, initially as a 100% subsidiary of Coalworks, but ultimately into a separately listed company under reorganisation, which would raise funds for proper exploration and development. The reorganised listed company is to be renamed Orpheus Energy Limited (Orpheus), with IPO planned for March 2011. Coalworks will remain a significant shareholder in Orpheus. Of importance, the board has agreed to offer all existing shareholders potentially a bonus issue, the ratio of course to be finalized. This would be the companys first dividend to shareholders. In addition, Coalworks shareholders will receive a priority share allocation Apart from these Australian assets, Orpheus has entered into a strategic alliance with Mega Coal International in Indonesia to jointly develop export coal mines. Our criteria in the acquisition of Indonesian coal assets have been; 1. A sound and trustworthy partner, with coal mining experience 2. Clean title, fully in compliance with Indonesian mining laws. 3. Low capital cost projects 4. Low operating costs. 5. Close proximity to barge loading and port areas, 6. Readily saleable qualities. Orpheus intends to acquire and bring Indonesian coal projects into early production through this strategic alliance with its Indonesian partner, who are already producing and exporting.
CWK Price at posting:
72.2¢ Sentiment: Hold Disclosure: Held
