Australia’s Palace Resources to Buy 75% Interest in West Papua Projects

Resources

Wednesday, 27 October 2010 11:39

Theindonesiatoday.com -- Australian miner Palace Resources Ltd announced on Wednesday that it has entered into an agreement to acquire 75% interests in mining projects in West Papua owned by Primecity Holdings Pte Ltd.

Palace Resources will purchase the assets via the acquisition of Primecity Holdings.

Palace proposes to acquire 100% of Primecity for an initial consideration of A$2.86 million with a further US$10 million payable upon certain milestones being achieved. From the transaction, Palace intends to make a strong foundation to develop commercial operations.

Discussions with West Papuan authorities are still underway, especially to upgrade the port to a bulk-loading port that has an unimpeded navigational lane to the Pacific Ocean.

The three projects cover approximately 1,970 square kilometres and are located to existing roads, operating ports, and adjacent to significant acreage held by a coal investment company.

Coal outcropping is evident on the tenements and immediately along strike from those to be acquired by Palace, with one 2.5 million outcrop containing high-grade, semi-soft metallurgical coal. Geologists in the area have reported numerous outcrops on the Palace leases.

Palace has assembled a team of five geologists who will start collecting samples for metallurgical testing. Engineers will begin scoping studies to upgrade the existing port to enable it to handle bulk materials.

An exploration program is currently being planned in conjunction with SRK Consulting. Around seven drilling rigs in operation from mid-November will be established as Palace’s plan to calculate a maiden JORC resource within six months.

Palace intends to appoint former Griffin Group senior executive Frederik Suhren as Managing Director. (hatman@theindonesiatoday.com)

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