Lysander Minerals Corp amends and extends option deal with Ukraine Coal
UEL has a 51 percent interest in Skhidna Vugilna Kompania (East Coal) which plans to reactivate the Verticalnaya anthracite mine in Ukraine's Donbass region.
Under the new terms, Lysander may now acquire UEL on or before June 30 2009 by issuing 22 million Lysander shares to UC. A royalty of US$1 per tonne sold will be payable by UEL from its share of future distributions of profit by East Coal. The previous agreement had required consideration of US$12 million, one half in cash and one half as a convertible note, to acquire UEC.
An NI 43-101 compliant technical report projects return on investment in excess of 30 percent and a net present value that is comfortably over US$300 million using a 12 percent discount rate, indicating the large potential of the mine, the company said.
In response to the deterioration in financial markets, Lysander and East Coal are assessing methods to develop early, profitable production at a reduced capital cost as a first stage. Full scale development is intended to follow as financial markets improve.
Plans for the first stage should be submitted shortly for additional review by Ukraine authorities. Arrangements for the long-term rental of certain mine infrastructure assets are also well advanced and are expected to be concluded before June 30, Lysander said.
Discussions are in progress regarding funding for the first stage, it added.
The Verticalnaya coal mine is situated in the Lugansk region of Ukraine. The mine previously produced anthracite, a high quality, premium priced coal. It is on care and maintenance after a period of low production following the end of the Soviet Union.
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