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Geo Energy Resources' subsidiary signs MOU on coal mining services

COAL producer and mine contractor Geo Energy Resources' subsidiary PT Sungai Danau Jaya (SDJ) on Wednesday signed a memorandum of understanding (MOU) for the cooperation of coal mining services with PT Bukit Makmur Mandiri Utama (BUMA).

SDJ holds production operations mining business licences for an aggregate area of 235.5 hectares located in the sub-district of Angsana and Sungai Loban, district Tanah Bumbu, province of South Kalimantan.

Meanwhile, BUMA is a company engaged in the provision of coal mining services.

Pursuant to the MOU, SDJ shall procure from BUMA services such as overburden removal and coal hauling in the mining area, and the rental of heavy equipment.

BUMA shall provide mining services for the entire life of the mine or until all of the coal reserves have been fully produced and/or extracted from the mining area.

The parties shall enter into an operational agreement no later than 30 days after the date of the MOU, after which the MOU shall be effectively terminated, unless mutually extended by the parties.

SDJ and BUMA will not be expected to commence work until after the operational agreement is executed.

Barring unforeseen circumstances and subject to execution risks, the MOU is expected to have a positive impact on the net tangible assets per share and earnings per share of the group for the current financial year ending Dec 31, 2015.

None of the directors or controlling shareholders of the company has any interest, direct or indirect, in the MOU, other than through the shareholdings in the company.

On Wednesday, the counter closed trading up 2.5 per cent at S$0.205.