|Sennen (v.sn) has potential assets worth close to $1.00/ share . The stock is currently trading under 0.20. Keep a very close eye on this one for upcoming news.|
Thu Nov 16, 2006
AGREEMENT TO SELL INTEREST IN MDL 282 (MIDDLEMOUNT) COAL DEPOSIT FOR AUS $15,000,000.
Mr. Ian Rozier, President of Sennen Resources Ltd ("Sennen") reports that Sennen has entered into a Share Sale Agreement (the" Agreement") that will result in the sale of its interest in the Middlemount coal deposit MDL 282 ("Middlemount") in Queensland, Australia to Custom Mining (Middlemount) Pty Ltd ("CMM"), a subsidiary of Custom Mining of Newcastle, New South Wales, Australia.
Under the terms of the Agreement CMM will acquire all the issued shares of Ribfield Pty Ltd ("Ribfield"), an Australian company beneficially owned by Sennen, and the owner of a 95% interest in Middlemount. The consideration to be paid by CMM to Sennen for the purchase of the shares of Ribfield will be A$15,000,000. The terms of the Agreement are summarized as follows:
1. The payment to Sennen of a non-refundable deposit of A$500,000 upon execution of the Agreement.
2. Completion of the Agreement (the "Completion") is to take place five business days following satisfaction of the following conditions:
(a) Regulatory approval in Australia for the transfer of MDL 283 (Ownaview) and EPC 640 (Collingwood) to another entity owned by Sennen;
(b) DJB Coal obtaining regulatory approval for the transfer of their 5% interest in MDL 282 to CMM; and
(c) Regulatory approval of the TSX Venture Exchange; but in any event not later than June 30, 2007.
3. CMM has a period of 8 weeks to complete a drilling and analysis program (the "DA Period") on MDL 282.
4. Within 16 weeks of the expiration of the DA Period, CMM is to place A$3,500,000 into an escrow account with Sennen's Australian lawyers, Blakiston and Crabb, in the event that Completion has not occurred by that time.
5. Upon Completion, CMM will pay Sennen A$2,000,000, and A$3,500,000 will either be paid to Sennen directly by CMM or be released from escrow to Sennen, as the case may be.
6. Within 12 months of Completion, CMM will pay Sennen a further A$4,500,000.
7. Within 24 months of Completion, CMM will pay Sennen the final A$4,500,000.
8. Upon Completion, CMM will provide bank guarantees for the two outstanding payments of A$4,500,000 to be paid by CMM on the 12 and 24 month anniversaries of the date of Completion in order to ensure payment of the funds as and when they are due; the escrow agent will not be required to hold these funds.
Following Completion, Sennen will retain its interest in MDL 283 (Ownaview) and EPC 640 (Collingwood), two coal deposits also located in Queensland. MDL 283 (Ownaview) is located 10km from Dalby in Queensland and is approximately 75km from the Tarong Power Station. As reported in a news release of the Company dated March 1, 2005, Ownaview contains a 'historical' Measured Resource of 172Mt of recoverable high volatile, low sulphur (0.4) thermal coal, 97Mt having a strip ratio of 5 to 1 (waste to coal). The average seam thickness is 7.1m.
EPC 640 (Collingwood) is located15km from the railhead at Wandoan 400km from Brisbane. As reported in the March 1, 2005 news release, Collingwood contains a 'historical' measured and indicated Resource of 115Mt with a strip ratio of between 5 to 1 and 7 to 1 (waste to coal), with a moderate ash content (15-20%) and high specific energy. The coal deposits at both Ownaview and Collingwood would be amenable to low cost dragline mining methods.
With the Agreement with CMM over Middlemount, Sennen is now in a position to better evaluate its options with respect to the further development of Ownaview and Collingwood.
The qualified person having prepared the contents of this news release is Mr. Ian Rozier, B.Sc.(Hons), M.Sc., P.Eng.