Perth-based diversified resources company RMA Energy Ltd has taken one step closer to finalising negotiations for the joint venture development of two Queensland based assets with Bounty Resources International Ltd and China Rail Engineering Corporation.
Perth-based diversified resources company RMA Energy Ltd has taken one step closer to finalising negotiations for the joint venture development of two Queensland based assets with Bounty Resources International Ltd and China Rail Engineering Corporation.
Broad terms of A$100 million agreement have been established and formal definitive agreements have been forwarded to the JV parties for approval, ahead of the formal agreement being signed.
The announcement is pasted below:
Western Australian based diversified resources company RMA Energy Ltd has moved a step closer to finalising negotiations for the joint development of 2 Queensland based assets, with definitive agreements being forwarded to Singapore based Bounty Resources International Ltd and its partner Chinese conglomerate China Rail Engineering Corporation for approval.
These agreements are seen as a pre-cursor to the signing of a formal JV Agreement in the near future.
CREC is a large-scale state-owned enterprise based in the People's Republic of China.
The Fortune 500 Company is the third largest civil construction enterprise in the world and the largest railway, road and tunnel construction contractor in Asia. Importantly, CREC has a strong technical team, and a willingness to expand its exposure into Australian resources projects.
The two exploration projects subject to the proposed JV agreement are the McCauley Creek (EPM 15117) and Coane Range (EPM 15127) projects in Northern Queensland, with Bounty and CREC agreeing to acquire up to seventy percent (70%) of these projects.
Under the terms of the agreement being reviewed by Bounty and CREC, the Asian partners will pay a total consideration of A$40 million in three tranches to acquire their stake in the projects:
1. A$1 million deposit within seven (7) working days from the execution of the definitive agreements,
2. A$19 million within four months of the deposit being paid, and
3. A$20 million within seven (7) working days after RMA is issued with a Mining License ("ML") for either project.
In addition to the consideration associated with the acquisition of this equity in the project, Bounty and CREC have agreed to also make an additional payment of A$60 million once the Mining Licence has been approved, with this money to be applied to towards the commercial development of the projects as required.
The board of RMA Energy makes no guarantee that these negotiations will result in the Chinese party entering into a formal Joint Venture Agreement; however the company is confident of a positive outcome, and felt it appropriate to make this statement so as to ensure it fulfils its on-going obligations regarding continuous disclosure.
In the meantime, CREC has committed to sending five representatives from its technical team to RMA's McCauley Creek and Coane Range tenements to accelerate the development of these areas, under the supervision of RMA management.
