Jameson Resources has exited a voluntary trading suspension after announcing two separate deals to acquire coal assets in northeast British Columbia, Canada likely to be popular with investors.
The company which requested a voluntary suspension from the ASX on Monday has entered into a sale and purchase agreement to acquire Dunlevy Energy which holds the Dunlevy coal project located in the Peace River Coalfields.
Jameson will settle the deal with a CAD 51,000 payment to each Dunlevy shareholder totaling USD 153,000 and the issue of 4 million non voting, convertible, redeemable, preferred shares to each shareholder, totaling 12 million. These shares will be exchangeable for fully paid ordinary shares in Jameson on a one for one basis, upon the meeting of certain milestones. Jameson shares were last trading at AUD 0.14 valuing the shares at around AUD 1.68 million.
Meanwhile, Jameson has also entered into a binding letter of intent to acquire certain assets of Nexx Coal including the Graham River, Peace Reach and Carbon East coal projects which are also located in the Peace River Coalfields. Jameson will reimburse Nexx’s licence application fees of CAD 132,700.50 and issue 10 million non-voting, convertible, redeemable, preferred shares. Again, these shares will be exchangeable for fully paid ordinary shares in Jameson on a one-for-one basis, upon the meeting of certain milestones.
1. The assets
The Dunlevy and Nexx projects comprise approximately 46,700 hectares of exploration ground. The projects overlie the north-west extension of the Peace River Coal Fields District of northeast British Columbia. Some of Canada major coking coal and pulverized coal injection coal mines Willow Creek, Brule, Wolverine and Trend are located along strike from the property.
Major resource projects including Cardero Resource Carbon Creek Project and Canadian Kailuan Dehua Gething Project are located within 15 kilometres of the project area. To the south, Xstrata Coal is developing several coal tenements, including the Lossan Coal Project that it acquired this month for CAD 40 million.
Lossan which covers approximately 3800 hectares has a NI 43-101 compliant Resource of 240 million tonnes with 186 million tonnes being in the Measured and Indicated categories. The Dunlevy Project and the Nexx Projects are located in a well-developed area, approximately 90 kilometres from Fort St John a regional commercial centre.
All weather roads and good quality secondary roads link the projects to Fort St John and Chetwynd where Canadian National Railway’s track is located. The rail leads to the Westshore, Neptune and Ridley coal terminals.
There is also potential to reduce transportation costs by utilizing waterways bordering the property to transport coal by barge to rail access. Exploration activities, including geological mapping and trenching, have been undertaken within the Dunlevy Project area. The previous owners of Dunlevy completed 53 hand trenches in 2009 discovering nine coal occurrences ranging in thickness from 0.8 metres to 3.5 metres.
Jameson plans to begin drilling and other exploration activities as soon as regulatory approvals are in place.
2. Funding
Jameson is aiming to raise just over AUD 3 million before costs through a combined entitlement issued and placement to fund the acquisitions, development of the company’s existing and newly acquired projects and provide additional working capital.
The company will issue a placement to predominantly institutional investors of 10.7 million ordinary shares at USD 0.12 each with one free option attached to every three placement shares to raise USD 1.28 million before associated costs. The free attaching Options will be exercisable on or before 30 October 2014 at USD 0.15.
The fully underwritten non-renounceable entitlement issue to existing shareholders will be on a one-for-six basis for existing fully paid ordinary shares held on the record date, at an issue price of USD 0.10. The offer is expected to raise about USD 1.77 million before associated costs.
3. Strengthening the board
Jameson also plans to add to its board with the appointment of Canada-based coal mining executive Mr David Fawcett as non executive chairman. Fawcett is a coal mining engineer, developer and executive credited with playing a major role in reviving the coal industry in north east British Columbia. Among his many prominent roles in developing Canada’s coal industry, Mr Fawcett was co founder and president of Western Canadian Coal for six years.
Jameson appointed Mr Fawcett to the board to assist the company in advancing its coal business in Canada.
(Sourced from www.proactiveinvestors.com.au)
