TORONTO, Oct. 28, 2013 /PRNewswire/ - Pacific Coal Resources Ltd. (TSXV: PAK) is pleased to announce that it has revised its previously disclosed plans (please see the Company's press release dated June 28, 2013) in respect of the port concession it owns at Barranquilla (Concession Contract No. 3-003 7-2008) (the "Port Concession"). The Company has signed two share purchase and sale agreements in respect of the sale of 26,795 shares of Alamota Holdings, the subsidiary of the Company that indirectly holds the Port Concession, whereby PAK sold approximately 53.59% of the Alamota shares for a total purchase price on these two transactions of approximately US$17 million. A third share purchase and sale agreement in respect of the sale of approximately an additional 37.83% of the Alamota shares is committed and expected to be signed towards the beginning of November 2013 for a total purchase price of an additional US$17 million.
The transaction is a "related party transaction" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Share Holders in Special Transactions ("MI 61-101") as one of the purchasers, that acquired approximately 37.83% of the shares of Alamota, is a wholly owned subsidiary of Blue Pacific Assets Corp., a principal shareholder of the Company.
While previously the related party subsidiary of Blue Pacific was acquiring a 50% interest, under the revised transaction, the subsidiary is acquiring an approximately 37.83% of the shares. The Company intends to rely on an exemption from the requirement to obtain a formal valuation and will be relying on the minority shareholder approval as prescribed by MI 61-101 in respect of the transaction obtained at a special meeting of shareholders held on August 12, 2013.
Hernan Martinez, Executive Chairman, said "We are delighted to see the Company's strategic plan take form as this port sale enables the Company to not only further strengthen its focus on its core business, but also provides the Company with cash to pay off outstanding short term debt."
The transaction is subject to TSXV approval and is expected to close in the last quarter of 2013.
Coke processing plant rental agreement
On August 1, 2013, an agreement was signed with C.I. Milpa S.A. for the rental of the Company's coke processing plant and related equipment for approximately $0.4 million. The duration of the contract will be 17 months, ending December 31, 2014. Over the course of the rental contract, the Company anticipates finalizing a long-term strategy for coke operations, with the current plan to re-start production in 2015.
La Caypa underground mining
In September 2013, the Company signed a contract with Carbomec de Colombia S.A.S. ("Carbomec"), a Colombian subsidiary of the Spanish company Mecanizaciones Carboníferas y Servicios S.A., who has more than 25 years of experience in underground mining operations. Through the aforementioned contract, Carbomec will first complete a pilot project of approximately 40,000 tonnes of coal, with the objective of contracting all of the underground mining if the pilot project is successful. The Company anticipates that preliminary work will begin in the fourth quarter of 2013 and, assuming successful completion of the pilot project, full operation to begin in 2014.
About Pacific Coal Resources Ltd.
Pacific Coal Resources Ltd. is a Canadian-based mining company engaged in the acquisition, exploration and production of coal and coal-related assets from properties located in Colombia. The Company's common shares are listed on the TSX Venture Exchange and trade under the symbol "PAK".
Forward Looking Information:
This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Pacific Coal to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and Pacific Coal disclaim, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
SOURCE Pacific Coal Resources Ltd.