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Coalworks Buys Land to Develop Mine

Coalworks (Vickery South) Pty Ltd (CVS), a wholly owned subsidiary of Coalworks Limited (CWK), entered into a binding contract to purchase “Kurrumbede” for $13.944 million which is the main land required to develop the Vickery South Coal Mine, coal handling and preparation plant (CHPP) and mine infrastructure. The land, which exceeds 2,600 hectares, also extends to the main highway to the east of EL 7407. ITOCHU Coal Resources Australia (ICRA), a wholly owned subsidiary of the Japanese resources and trading conglomerate, ITOCHU Corporation, has arranged funding for the purchase from National Australia Bank supported by a corporate guarantee from ICRA. In addition, ICRA Vickery Pty. Ltd. (ICRAV) (a subsidiary of ICRA and party to a farm-in arrangement with CVS under which it may spend up to A$11 million to acquire up to a 49% interest in the Vickery South Coal Project), has been granted an option to purchase up to 49% of Kurrumbede (subject to obtaining required Australian foreign investment approval). The option may be exercised during the period of the farm in arrangements between CVS and ICRAV. CEO Andrew Firek said: “We are especially pleased by this strategic acquisition and are appreciative of the strong support and commitment shown by ITOCHU in arranging funding for this purchase. The land purchase secures our development plans because it not only hosts our principal coal deposit but provides the best site for our CHPP, mine infrastructure and links the mine site with the main highway to the east. There is also surplus land for further development. We express our sincere thanks to ITOCHU which we believe now considerably strengthens the mine development process.” Coalworks is close to releasing its preliminary feasibility study which will be a further milestone in the mine development process.