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Global Coke Off-Take Agreement

30th Nov 2011 07:00

RNS Number : 0334T
Beacon Hill Resources plc
30 November 2011
 



Beacon Hill Resources Plc / Ticker: BHR / Index: AIM / Sector: Mining

30 November 2011

Beacon Hill Resources Plc ('Beacon Hill' or 'the Group')

Global Coke Off-Take Agreement

 

Beacon Hill Resources Plc (AIM: BHR), the AIM listed coking coal producer, is pleased to announce that it has updated its 10 November 2010 off-take agreement with its partner Global Coke Limited ('Global Coke') ahead of its first production of coking coal which is to commence in early 2012. 

 

Overview

·; Revised off-take agreement for up to 600,000 tonnes of coking coal per annum from the Minas Moatize Mine for the life of the mine.

·; Following the confirmation of Minas Moatize coking coal as a hard coking coal, the parties have agreed to the pricing benchmark being a Free-on-Board ('FOB') Australia Hard Coking Coal index

·; Inclusion of a Delivery Schedule concept whereby both parties shall enter into a pre-agreed quarterly Delivery Schedule based upon predicted production and logistics capacity

·; Commencement of first production of coking coal on course to commence in Q1 2012 with transportation to the Port of Beira utilising the Group's proven trucking operation

 

Justin Lewis, Chairman of Beacon Hill commented, "We are very pleased to have concluded this revised off-take agreement with our long term partner Global Coke, prior to the commencement of production of coking coal from the Minas Moatize Mine early next year. The agreement reflects the development of the mine over the last 12 months and gives the parties greater flexibility taking into account predicted short term coking coal production and logistics capacity, whilst the agreed pricing index follows the reconfirmation of Minas Moatize coking coal as a hard coking coal. Beacon Hill considers Global Coke to be a long term strategic partner and is committed to working together throughout the development of the Minas Moatize Project." 

 

Devendra Ojha, Managing Director of Global Coke said, "We are delighted to have concluded this revised agreement with Beacon Hill Resources which cements our long term partnership as well as providing Global Coke with a secure supply of coking coal from the Minas Moatize Mine."

Revised Off-Take Agreement

 

BHR Coal (Mauritius) Limited, a wholly owned subsidiary of Beacon Hill Resources Plc ('BHRC'), has entered into a revised formal off-take agreement with Global Minerals & Metals Pte Limited ('GMM'), a subsidiary of Global Coke. Pursuant to the agreement, BHRC shall offer for sale and GMM may purchase, either on a monthly basis or in accordance with any agreed quarterly delivery schedule, up to an anticipated 600,000 tonnes per annum of coking coal produced by the Minas Moatize mine, for the life of the mine. The coal will be delivered for sale at the Port of Beira Free-on-Board ('FOB') at a price linked to the prevailing hard coking coal benchmark price (FOB Australia). 

 

As part of the initial off-take agreement, Beacon Hill received from GMM a deposit of US$5 million against initial shipments of coal that was received on 10 November 2010 and continues to be held as a deposit for the coking coal under the revised off-take agreement. 

 

Included in the revised off-take agreement is a facility for BHRC and GMM to agree a Delivery Schedule on a quarterly basis, which will be based upon predicted production and logistic capacity and, once agreed, will be binding on the parties for the relevant quarter. In addition, a change of control clause has been included in the revised agreement which provides either party with the right to terminate the agreement in the event of a change of control of Beacon Hill or the Minas Moatize Mine, subject to a termination payment of US$5 million by BHRC. 

 

Beacon Hill continues to make solid progress at Minas Moatize with production of thermal coal building from the initial open pit mine and the production of coking coal on target to commence in Q1 2012. Coal is being processed at Minas Moatize's first wash plant and continues to be transported to the Port of Beira via truck in readiness for the Group's first export shipment, which remains targeted before the end of 2011. 

 

For further information on the Company, visit www.bhrplc.com or contact:

 

Justin Lewis

Chairman, Beacon Hill Resources Plc

+61 (0) 3 9627 9910

Timothy Jones

Finance Director, Beacon Hill Resources Plc

+44 (0) 1372 464549

John Prior

Collins Stewart Europe Limited

+44 (0) 20 7523 8350

Adam Miller

Collins Stewart Europe Limited

+44 (0) 20 7523 8350

Jeremy Wrathall

Renaissance Capital Ltd

+44 (0) 20 7367 8273

Susie Geliher

St Brides Media & Finance Ltd

+44 (0) 20 7236 1177

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
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