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Guildford Coal negotiates reduced milestone payment for Springsure coal project in Queensland

Last updated: 13:00 30 Dec 2013 AEDT, First published: 12:00 30 Dec 2013 AEDT

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Guildford Coal (ASX: GUF) has noted revised commercial terms of a project milestone settlement agreement regarding its prior acquisition of the Springsure coal project in Queensland.

The payment due to be made by Guildford has been reduced from $11 million to $8.8 million.

Guildford recently announced a maiden coal JORC Indicated Resource for its Springsure Project of 43 million tonnes, which triggered a settlement payable to Resco Projects under the sale agreement by which Springsure was acquired by Guildford.

The company was to have paid five tranches of $2.2 million for each 10 million tonnes, up to a maximum 50 million tonnes of JORC Indicated Resource. This has been reduced to four tranches.

As an additional positive, payment will be made by the issue of Guildford shares instead of a cash settlement.

Under the terms of the Springsure share sale agreement the volume weighted average price of Guildford ordinary shares to be issued has been calculated as $0.08239 per share.

This price results in 106,810,121 fully paid ordinary shares to be issued in full satisfaction of the Springsure Settlement.

The transaction is conditional upon formal documentation being agreed and Guildford shareholder approvals.

 

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