Australia-based Altona Energy Plc (Altona), the AIM listed energy company, announced Friday the following update in respect of the Arckaringa Project in South Australia.
Altona has signed a memorandum of understanding (MOU) with Sino-Aus Energy Group Limited, a British Virgin Islands Company (Sino-Aus Energy) and Wintask Group Limited (Wintask), the Company's 29.04 percent shareholder (together the Investing Parties).
The MOU signed with the Investing Parties includes the 'in principle' terms for an investment in Arckaringa, which remains subject to due diligence and the agreement of the final contract. The MOU states the investing parties intention, which is subject to due diligence, to invest $49.4 million (CNY 300 million), into Altona and the Arckaringa project, to fund the completion of the Bankable Feasibility Study (BFS). The due diligence is underway and the Company expects that this will be completed on or before May 15 with the Company making a further announcement in due course.
Wintask is a related party as defined by the AIM rules. Therefore in the event that an agreement with Wintask is signed this may constitute a related party transaction under the AIM rules. Furthermore any agreement will be subject to the necessary regulatory approvals in the United Kingdom, China and Australia.
Altona Chairman Michael Q Zheng said: "The recently announced termination of the joint venture with CNOOC-NEI, or CNOOC New Energy International (Australia) Pty Ltd., has enabled the Company to open negotiations in earnest with motivated third parties and the signing of the MOU represents an encouraging next step towards finding the right partner to develop the Arckaringa project.
"Completing a transaction with Sino-Aus Energy would provide Altona with a strategic partner capable of providing the support required for the completion of the BFS and beyond. I believe a future partnership between Sino-Aus Energy and Altona would have the potential to take the Coal to Liquids/Coal to Methanol project through to completion and thereby realize the world class potential of our project in South Australia."
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