Killara Acquires 80% Stake in Thermal Coal Producer Borneo Emas Hitam

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Killara Resources Limited (ASX:KRA) has exchanged contracts and has acquired 80 percent interest in East Kalimantan thermal coal producer PT Borneo Emas Hitam (BEH). Killara will pay $2.2 million and will acquire the share of BEH along with strategic alliance partner and of the major shareholders Zulkarnaen family. Killara will also take an option to buy 60 percent interest in PT Pagun Taka (PT), which is a potential coal concession in Central Kalimanatan.

For Killara, it is a vital transaction as after the deal the firm will transform from a junior mining explorer to an Indonesian coal producer and the transaction will further provide Killara with a coal producing mine and a green coal opportunity, which is no doubt a key transaction for the company.

Terms of the agreement

  • Killara willpay US$2.2 million to acquire 80% of BEH.
  • After the transaction, Killara will control the operations with immediate effect.
  • Executives will be appointed by Killara on the Board of BEH, and Killara will have the majority representation.
  • Killara will pay extra US$3.00 per tonne over a minable reserve threshold, which will further ensure that the cost of acquisition remains at US$3.00 per tonne.
  • Killara will have an option to buy 60 percent interest in PT Pagun Taka. Killara has a time frame of 12 months to decide over this transaction and can buy 60 percent stake in PT after paying an equivalent of US$1.25/tonne on a minable reserve.

Other recent news

Mr Wim Iskandar has been appointed as the non-executive director on the board. The company said that the time is good from the perspective of the advancement, which is going on in the Killara’s Indonesian business interests.

Wim has an MBA degree from RVB/MSM and has deep experience in the field of investment finance, banking and agribusiness over 20 years. Wim is also founder and President Director of BBIP Palm Group and Proteksindo Group. He is also Founder and Managing Shareholders of various other companies like:

  • PT Agri Capital Resources Group
  • PT Bailangu Capital Investment
  • PT IES Nusantara
  • PT Tempirai Energy Resources
  • PT Kikim Resources
  • PT Pampangan Palm Resources

The WIZ investments Pvt Ltd, which is a company related to Zulkarnaen family have acquired a 22.2 percent equity interest in Killara after the announcement made to ASX on 25th March 2013 regarding rights issue and under writing agreement.

About the company

Killara Resources Limited (ASX: KRA) is in the business of exploration of minerals, which also focuses on energy and other resources in Indonesia. The main thrust of the company is on adopting those mining practices that are sustainable when, and if the projects are advanced in combination with the on-going community engagement.