New Horizon renegotiates Kinney deal
PERTH (miningweekly.com) – US-focused coal hopeful New Horizon Coal has shaved off $9-million on the acquisition price of its Kinney coal project, in Utah.
The ASX-listed junior said on Monday that it had restructured the 2011 asset purchase agreement for the Kinney project, renegotiating the total purchase price for the property from $25-million to $16-million.
MD Michael Placha said the restructuring of the agreement was a critical step forward in the company’s development of the Kinney project, and added that the revised price better reflected the current state of the thermal coal markets.
“Our renegotiation of the asset purchase agreement allows the company to continue adding value to the Kinney project. It better positions us to secure project financing and move the project into production,” he added.
With the price now renegotiated, New Horizon’s outstanding payments for the Kinney project have been reduced from $15-million to $6-million.
The Kinney project, which is fully permitted, has historically produced about 30-million tonnes a year of coal. A revised prefeasibility study into the project contemplated the phased development of Kinney, and placed an initial capital cost of $23-million on this development.
New Horizon was currently in discussions with several prospective investors to sell equity and offtake rights in the Kinney project, which would provide the company with the necessary capital to complete a bankable feasibility study and provide a partner for project financing.
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