Excelven will pay US$13 million for Tomen America Inc’s 56% interest in the Cosila project and Tomen’s 100% interest in TCSV, the operator of the Palmarejo export port facility on Lake Maracaibo.

Excelven currently owns 31% of Cosila and has managed the exploration, mine design and

Government approvals process during the past five years.

Excel will continue to manage the project and expects that project financing can be obtained without the need for further equity investment from Excelven shareholders. The company expects to enter an ‘arms-length marketing and/or off-take agreement’ for Cosila’s coal with AMCI and Alpha prior to production starting.

Cosila has reserves of around 30 million tonnes of low-ash, low-sulphur and high-energy coal making it attractive to both American and European consumers. Cosila coal is of similar quality to coal from the neighbouring Paso Diablo mine which is well established in export markets and is currently attracting a price of more than US$60 per tonne FOB.

Coal from Cosila will be exported through Palmarejo, a barge loading port facility with a current capacity of around 1Mtpa with ultimate capacity of more than 5Mtpa. Palmarejo has operated since 1993 and shipped around 800,000t of third party coal in 2003 from nearby Venezuelan and Colombian mines.

Cosila is planned to be a 2Mtpa open cut mine with a 15 year mine life. Capital cost is anticipated to be approximately US$40 million which Excel expects will be provided by way of project financing.

Approximately US$2 million is expected to be spent on the project prior to project financing being sought in late calendar 2005.

“The introduction of substantial international coal industry partners who, along with Excel, have the desire and resources to see coal produced at Cosila is an extremely positive development for the project,” said Excel Coal managing director Tony Haggarty.

“By combining the three parties we have optimised the level of development, marketing and operational skills needed to ensure the project’s success.

“For Excel shareholders, the transaction recognises the value which Excel has already added to the project with Excel’s beneficial interest increasing from 31% to between 46% and 49% without further investment.

“For AMCI and Alpha, the transaction provides an attractive entry price to a project which fits well with their core markets and which has substantial value to be added as it is developed,” he said.