Kangaroo moves towards direct ownership of Pakar coal project in Indonesia
Kangaroo Resources has executed a deeds of transfer agreement with PT Bayan Resources, granting it direct ownership of five key concessions and one asset-holding company at Pakar Thermal Coal Project in Kalimantan, Indonesia.
Kangaroo said the divestment is in line with the company's aim to restructure its assets in line with Indonesia's new mining law.
The law, which was introduced in 2009, offers permission for direct foreign ownership.
Previously, the Australian-based coal producer had acquired a 99% stake in the Pakar project from Bayan.
Kangaroo has converted each of the five concession-holding companies with IUP licences and one asset-holding company to Indonesia-based PMA companies, also known as foreign investment companies.
The restructure also involved transferring the 99% stake in the Pakar project from Bayan to Kangaroo.
Direct ownership is expected to secure Kangaroo's exposure to future cash flow generated by the project.
Kangaroo is currently in preliminary production at its Mamagak Coking Coal Project and is developing the GPK project.
Kangaroo Resources managing director Mark O'Keefe said that the company is pleased to have completed the transfer of equity for the six companies so far.
"We believe this will make a significant positive contribution and be instrumental in achieving the objectives of the Pakar Project," said O'Keefe
"With direct ownership of the five Concessions and the asset holding company secured, this will provide the company with the impetus to fully develop and commercialise the company's cornerstone asset."
Kangaroo has recently awarded a five-year mining contract to PT Putra Perkasa Abadi. The mining contract sets coal production targets over the five-year period with a current target of up to 1Mtpa.