China Qinfa Group set to increase stake in Tiaro Coal
China Qinfa Group is set to increase its equity in Australian-listed Tiaro Coal (ASX: TCM) from 21% to 30% after recognising the strength of the partnership which commenced late 2009.
Qinfa holds its interest in Tiaro through its wholly owned subsidiary Bright Rock Holdings. Tiaro proposes to issue Bright Rock 8 million options, exercisable at the lesser of 25 cents and the Volume Weighted Average Price over ten business days prior to exercise.
The options will be exercisable before 31st March 2010, potentially raising $2 million.
The issue of the options and subsequent allotment of shares is subject to shareholder approval.
In December 2009, with shareholder approval, Qinfa Group acquired 13.4 million shares in Tiaro and established itself as a significant shareholder and strategic partner of Tiaro.
Qinfa Group and Tiaro will continue to support the development of Tiaro’s coal interests to establish a JORC compliant resource of high quality metallurgical coal, enabling the Qinfa Group to participate in coal off take of future potential mine production.
The companies will also commence coal trading to develop profitable bi-lateral coal trade and develop new coal exploration opportunities independently and with third party coal mine owners aimed at identifying new sources of coals for the Qinfa Group.
Established in 1996, the Qinfa Group is a leading coal operator in China whose business includes purchase and sales, filtering, blending, storage, transportation and shipping of coal.
QINFA was the largest non-state-owned coal operator in China in terms of annual coal trading volume for the year ended 31 December 2008.
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