Morien Resources Corp. (TSX VENTURE:MOX) announced Feb. 10 that at a special meeting held that day, Morien shareholders voted overwhelming in favor of a special resolution authorizing the exchange of Morien’s 25% working interest in the Donkin Coal Project in Cape Breton, Nova Scotia, for cash and a royalty.
Under the terms of thetransaction, and in return for the 25% working interest, Kameron Collieries ULC, an affiliate of U.S. coal operator Chris Cline’s The Cline Group LLC, agreed to pay Morien cash consideration of C$2m on closing, an additional C$2m on the earlier of first production or the 2nd anniversary of closing, and an additional C$1.5m on the earlier of first export sales or the 3rd anniversary of closing. Kameron also agreed to pay Morien, for the life of the project, a gross production royalty of 2% on the first 500,000 tonnes of coal sales per calendar quarter and 4% on any coal sales from quarterly tonnage above 500,000 tonnes.
AShareholders voted 99.99% in favor of the transaction. The deal is expected to close before the end of February.
Morien is a Canadian mining exploration and development company. The Donkin Coal Project is fully permitted, including approval for construction of an on-site barge-loading facility to access deep tidewater. Approximately C$43m has been invested in the project since 2006, including C$15m by Morien. This is an underground mine that would work from entries on land out under the seabed of the Atlantic Ocean off of Cape Breton Island.
Morien Resources said Dec. 3 that international commodities company Glencore PLC has completed the sale of its 75% interest in the Donkin Coal Project in Nova Scotia to Kameron Collieries, which along with this pending deal for the other 25% would give Cline full control of this project.
Also of note, Alpha Natural Resources (NYSE: ANR) announced Jan. 12 that President Paul Vining, a veteran coal marketer with a background at several major coal producers, is leaving the company to accept a CEO position with a Cline Group affiliate that will be focused on the acquisition and operation of coal mines outside the United States.