Under the conditional agreement, which is subject to shareholder approval and due diligence, Epic will acquire up to 100% of the issued shares in the Subi Cove development, giving the company access to two coal exploration licences in the Long Bagun district.
Epic will initially pay the vendors $US861,000 via the issue of 4 million fully paid ordinary shares at 20c, which is a 90% premium to the last traded price of A$0.105.
The TBK and TBW coal licences are located to the south of the Mahakam River, and are in close proximity to Kangaroo Resources Mahakam semi-soft coking coal mine.
The licences cover approximately 15,000ha.
Epic Resources executive chairman Faldi Ismail said the agreement signified a turning point for the company.
“This is an exceptionally exciting transaction for Epic,” he said.
“Not only does it provide an attractive entry into one of the most exciting mineral-rich countries in the world, but also provides potential access to a commodity that has experienced strong demand growth as a direct result of the industrialisation of China and India.”
East Kalimantan is the most established mining area in Indonesia, accounting for 65% of the country’s coal production in 2010.
