Option Agreement
The Company signed a definitive option agreement (“Option Agreement”) for the sale of the Basin Coal Mine for consideration of cash and shares totaling Cdn $8.25 million. Under the terms of the Agreement, NWPC Pty Ltd (“NWPC”), a private Australian company, has agreed to an option to purchase the Company’s interest in the mining agreement under which the Company has the right to mine coal at the Basin Coal Mine as well as all remaining assets of the mine, including the 400,000 tonne per year wash plant for $4.25 million in cash and $4 million in shares of Jameson Resources Limited (“JAL”) a public Australian Company. Subsequent to December 31, 2008, the Company received an option payment of $1,000,000 in cash and 7,407,408 shares of JAL which are subject to a one year escrow provision. The final option payment of $3,100,000 in cash plus closing adjustments and 7,407,408 JAL shares is due on or before May 31, 2010, at which time the Company’s interest in the mining agreement would transfer. A final option payment of 7,407,408 shares is due on or before the earlier of commencement of coal production and May 31, 2012.
|
