for the benefit of others - this from September 2008 announcement :-
COALWORKS Limited (ASX: CWK) has entered into a joint venture with Willala Pastoral Co. Pty Ltd (“Willala”), one of the major owners of land within Coalworks’ Oaklands licence area. The joint venture is wide ranging in scope but is primarily aimed at facilitating the development of the Oaklands coal mine, including coal processing facilities, infrastructure and a clean coal processing plant, by securing access to approved locations on Willala land. Commenting on the significance of the joint venture, Coalworks Managing Director and CEO Andrew Firek said: “This is a key milestone in Coalworks’ development as it has established a strategic alliance with the major landowner in Coalworks’ coal-rich northern zone and provides a platform for securing further land rights for the Oaklands Coal Project.” Mr Firek said that the joint venture was indicative of the strong relationships being forged with the local community.” The joint venture reflects the solid relations we are building with landowners in the Oaklands area. Willala is a long-term landholder and wheat producer in the Oaklands area and has grain trading and civil contracting expertise. Their local knowledge and commitment to the area will be of invaluable assistance to Coalworks,” said Mr Firek. Mr Andrew Reid, a spokesman for Willala, said: “We have been impressed by the progress Coalworks has made at Oaklands and we are looking forward to facilitating this exciting project. We are also pleased that our options in Coalworks will allow Willala to participate in Coalworks’ growth at Oaklands.” Terms of the Joint Venture Under the terms of the agreement, Coalworks will pay a CPI indexed royalty of $1.00 per tonne of product coal sold from or fed into a power station (or similar plant) on the Willala land. Coalworks will invest $2 million into a joint venture trust which will establish a land portfolio. Coalworks will own 40 percent of the trust and Willala will own 60 percent. The land trust has been established under strict prudential conditions so that it can invest and fulfil the objectives of purchasing land and to facilitate Coalworks’ mine development. Any further royalties or benefits earned will be shared by the joint venture partners. Willala will manage the Joint Venture as it has the management expertise to both acquire agricultural land prudently and to maintain agricultural activities until it is required as mining land Willala will receive the pending Connell Hatch and Uhde Shedden studies by 31 October 2008 to allow Willala due diligence until the end of this year. Coalworks has the right to deliver a final feasibility study to Willala by 31 December 2010. Willala has also been granted one million 31.12.2012 Options exercisable at 50c per option as a further incentive to support Coalworks’ activities. The Joint Venture envisages that following Willala’s review of these technical studies a licence agreement would be granted for Coalworks to develop the mine, facilities and process plant on the Willala land.
CWK Price at posting:
76.7¢ Sentiment: Buy Disclosure: Held
