JOHANNESBURG (miningweekly.com) – Emerging global coking coal producer Tigers Realm Coal has signed two binding heads of agreement (HoAs) with its joint venture (JV) partners to increase its percentage ownership of the Amaam North project, in far-east Russia, from 80% to 100%, and to reduce yearly JV payments on the project’s coal revenues, compared with current royalties.
Tigers Realm aimed to reduce the total payment and duration of JV payments attributable to revenues from Amaam North.
The company said it would also amend the shareholder’s agreement for the Amaam project to streamline the approval and governance processes.
The first HoA, signed with Cyprus-domiciled BS Chukchi Investments, committed the JV partner to converting its 20% interest in the project to a 2% royalty of gross sales revenue from coal produced at Amaam, thereby increasing Tigers Realm’s ownership of the project.
BS Chukchi would also acquire 3% royalty of gross sales revenue from Siberian Tigers International. Tigers Realm would then acquire the 2% and 3% royalties for $25-million, to be paid within 20 years.
The second HoA, signed with Bering Coal Investments, covers amendments to the Amaam project to improve the processes governing the joint partners’ decision to develop and mine coal at Amaam, and to improve corporate reporting and board processes, as well as work programme approval and management processes.