Nov 21 2013
Morien Resources Corp. ("Morien" or the "Company"), is pleased to announce it has finalized the terms of a Letter of Intent (“LOI”) for a coal off-take agreement providing for the sale of production from the Donkin Coal Project (“Donkin Project” or “Project”) located in Cape Breton, Nova Scotia, Canada. Concurrently, Morien has signed a Memorandum of Understanding (“MOU”) with an operating partner providing for the establishment of a Joint-Venture Agreement to develop and operate the Donkin Project.
These milestones were precursors to submitting an offer to Glencore-Xstrata (“Glencore”) on November 4th, 2013 for the purchase of its 75% interest in the Donkin Project, and Morien has subsequently entered negotiations with Glencore. The LOI and MOU are conditional upon the purchase of the 75% interest in the Donkin Project currently owned by Glencore, and are subject to the conversion of each into definitive contracts.
Glencore announced in April 2012 that it intended to seek an operating partner to acquire its share of the Donkin Project and issued the following statement from Peter Freyberg, Chief Executive Officer, Xstrata Coal: “Over the past decade, Xstrata Coal (now Glencore) has evolved, as has our business strategy, and core to that is a focus on larger volume mining complexes. We believe the Donkin Coal project is a valuable asset to a qualified partner and remain positive about its viability. We will continue to work closely with Erdene (now Morien) and the Province of Nova Scotia to secure an operating partner to advance the project to production”.
In a media statement released today, Glencore indicated that during negotiations it will be minimizing expenditures at the Project. Glencore indicated this involves securing the tunnel entries for a new operator. Morien views these actions by Glencore as an indication of its willingness to transition the Project to new owners and Morien is confident Glencore would do nothing to damage the Project given the advanced level of negotiations between the parties. Although there is no guarantee the current negotiations will end in a transaction, Morien management believes Glencore shares its desire to see the Project developed for the benefit of all stakeholders.
“After many months of hard work and dedication by all involved, we have reached the stage where we can undertake the last step of the transaction to develop and begin production from the Donkin Project” stated John Budreski, CEO of Morien. “This is a win-win for all parties involved. We believe we have partnered with a first-class operator and secured a very solid sales base with an off-take partner and are pleased we can readily assist Glencore with its objective of providing a qualified operating partner to assume its interest and advance the Donkin Project to production. We look forward to working with Glencore to arrange reasonable terms for the purchase and transfer of its ownership.”
Source: http://www.morienres.com/