It is reported that Strzelecki Metals has been reinstated to official quotation on the ASX after a voluntary suspension following an update informing the market of an option agreement over a coal asset in Kyrgyzstan.

The option is with shareholders of Posit Coal Pty Ltd for the acquisition, pending due diligence and issue of notice of intention to proceed of 100% of the issued capital of Posit.

Posit is an Australian private mineral exploration company with a 100% owned Kyrgyzstan subsidiary holding an ultimate 72% interest in the Kara Keche Centralny coal deposit in the democratic republic of Kyrgyzstan.

The major highlights of the potential acquisition include access to an operating coal mining operation, which the company said has the potential to rapidly expand production to 1 million tonnes per annum to 2 million tonnes per annum in the medium term.

Importantly, a program is already underway to convert current mineralization estimates to JORC categories.

1. Consideration

On settlement Strzelecki will issue to the vendors USD 6.5 million in ordinary shares at an issue price of USD 0.025 per share and contribute USD 1 million in cash to Posit to settle debts and loans of Posit existing at the time of settlement.

There are also some achievement milestones which would require Strzelecki to deliver additional consideration.


2. Management

Following the settlement, the experienced Mr Graeme Rowley will be added to the board of Strzelecki. Mr Rowley brings a wealth of experience in the mining sector due to being a non executive director of Fortescue Metals Group and was previously an executive with Rio Tinto

(Sourced from www.proactiveinvestors.com.au)