28 July 2016
Altona Energy
Plc
(“Altona” or the “Company”)
Update on Joint
Venture
The Board of Altona (AIM: ANR) provides the following update for
shareholders:
Further to recent discussions with the South Australian
Government the board of the Joint Venture company, Arckaringa Coal
Chemical Joint Venture Co Pty Ltd (“JV Company”) has been informed
that, as well as its existing Exploration Licences, it will need to
obtain a Petroleum Exploration Licence (“PEL”) before it can
commence test drilling at its Arckaringa site in South Australia. This licence, which is
governed by the Petroleum and Geothermal Energy Act (2000) requires
companies to conform to higher levels of regulation and is
considered necessary when extracting any type of hydrocarbon
product (including extraction by way of Underground Coal
Gasification (“UCG”)).
The JV Company proposes to comply with this new obligation and
is reviewing the required procedures. However, it is understood
that the three Exploration Licences relating to the tenements owned
by Altona share a partial overlap with PELA604, an application for
a PEL owned by Linc Energy Ltd, which entered into voluntary
administration on 15 April 2016.
As the area covered by this PEL application is still valid
despite Linc Energy being in administration, the JV Company has
been informed by the South Australian Government that it may need
to acquire this PEL it in order to commence any UCG activity on its
tenement. The Company has made representations to the South
Australian Government requesting assistance with the regulatory
matter and will continue to liaise with them in this regard.
The Company advises shareholders that the acquisition of the PEL
may take a number of months although the directors are not
currently in a position to state definitively how long the process
will take. It is understood by the JV Company that the relevant
assets of Linc Energy are to be acquired by a third party whose
identity is unknown. The JV Company is attempting to establish the
identity of the purchaser and may then enter into negotiations to
acquire the right to apply for the PEL.
During this period of inactivity, the Board of Altona has agreed
with its joint venture partners, Sino-Aus Energy Group Ltd
(“Sino-Aus”) and Wintask Group Limited (“Wintask”) that the Joint
Venture Agreement cannot be implemented as contemplated. The
Joint Venture partners will discuss possible variations to the JV
Agreement in due course to incorporate the change in timing as well
as the following matters:
-
The Joint Venture Partners have agreed not to proceed with the
second subscription by Sino-Aus for 100 million ordinary shares of
Altona at the subscription price of 0.75
pence per share (to raise £750,000). The parties will
endeavour to re-negotiate the terms and timing of this subscription
as and when the PEL has been granted to the JV Company;
-
as the partners of the JV Company have agreed that the project
should be postponed until the PEL is granted, the parties have
agreed the return to Sino-Aus its first tranche payment of AUD$5.4
million (less what has been already spent on the project). Sino-Aus
will deposit the funds into short-term investment instruments,
allowing it to generate a return. Wintask will leave its first
tranche payment of AUD$0.6 million with the JV Company.
Finally, the reports being prepared by mining services company,
Parsons Brinckerhoff, have been completed; these being the UCG
technology report and the test drilling timetable relating to the
proposed bankable feasibility study. Therefore, once the
licencing issue has been resolved, and the Joint Venture terms
renegotiated as required, the project will be in a position to
commence.
The Company will make further announcements on all of these
matters in due course.
-ends-
For further information, please visit www.altonaenergy.com or
contact:
Altona Energy
plc
Qinfu Zhang, Executive Chairman
Nick Lyth, Non-Executive Director |
+44 (0)7769 906
686 |
Leander (Financial
PR)
Christian Taylor- Wilkinson |
+44 (0)7795 168
157 |
Northland Capital
Partners Ltd (Nomad and Broker)
Matthew Johnson / Gerry Beaney (Corporate Finance)
John Howes / Abigail Wayne (Corporate Broking)
|
+44 (0)203 861
6625 |
About Altona
Altona is listed on the London Stock Exchange’s AIM
market. Its principal focus is on the evaluation and
development of the Company’s flagship Arckaringa Project to exploit
the significant coal resources contained in three exploration
licences covering 2,500 sq. kms in the northern portion of the
Permian Arckaringa Basin in South Australia. The Project is
designed to produce syngas products for the Australian market and
export from a resource exceeding 7.8 billion tonnes of coal (1.3
billion tonnes JORC compliant).