VANCOUVER – Cardero Resource Corp. (TSX:CDU) has signed a deal to acquire Trefi Coal Corp., a wholly owned subsidiary of Anglo Pacific Group PLC., and its Trefi metallurgical coal deposit.
The property includes 15 coal licences and three licence application areas, totalling 9,437 hectares, located approximately 30 kilometres southeast of Chetwynd, B.C.
Under the deal, Cardero will pay $ 3.5 million in cash, 500,000 shares and warrants to buy another one million shares at a price of $ 1.40 per share for 18 months after closing in exchange for an option for a 50 per cent stake in Trefi.
In order to exercise the option, the company must complete a bankable feasibility study for the Trefi coal project within four years of closing.
If the feasibility study if is positive, the company may acquire the remaining 50 per cent stake by making a production decision, paying Anglo Pacific $ 5 million and issuing another one million Cardero shares.
If Cardero does not elect to go ahead with the project, Anglo Pacific will have the option to reacquire the 50 per cent stake in Trefi from Cardero by paying the company half of what was spend on the feasibility study.
Once in production, Anglo Pacific will receive a gross revenue royalty of three per cent.
If the feasibility study is not positive, Cardero Company will keep its stake in Trefi and commit to periodic reviews of the bankable feasibility study.
If, after two years, the study remains negative and company has not elected to make a production decision and acquire the balance of Trefi, then a buy-sell process may be initiated in which the company offering the highest price will be able to buy the other’s stake.
Local news from metronews.ca/vancouver
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