With us today is Frank C. Smeenk President & Chief Executive Officer of KWG Resources Inc. Mr. Smeenk discusses recent conversation with Noront Resources after proposed acquisition of Cliffs Chromite was announced.
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NEWS - CNSV Acquires 50 Percent Interest in LeeCo Development in Half Million Dollar Deal
Sep 18, 08 04:32AM
CNSV Acquires a 50 Percent Equity Interest in LeeCo Development, LLC Which Leases Coal Mineral Rights, for $50,000 in Cash and $450,000 in Common Stock Valued At $2.00 Per Share
HENDERSON, Nev., Sept. 18, 2008 -- Consolidation Services, Inc., ("CNSV") (OTCBB:CNSV), engaged in acquiring land for organic farming operations and developing potential energy resources on some of its acquired properties, announces the closing on an agreement to acquire a fifty (50%) percent equity ownership interest in LeeCo Development, LLC ("LC") for $500,000. LC has obtained the leases of coal mineral rights to approximately six hundred and fifty (650) acres of land in eastern Kentucky. CNSV used a combination of $50,000 cash and $450,000 (225,000 shares valued at $2.00 per share) of restricted common stock to close the transaction. In addition, CNSV will capitalize LC with $50,000 to fund development activities on the property, such as obtaining coal-mining permits and additional minerals leases. The two owners of the 50% equity interest in LC will also contribute $25,000 each, making the total working capital of $100,000 in LC. The shares will be sold subject to a lock-up/leak out agreement, with weekly sales of up to 4,327 shares permitted during the period from January 1, 2009 through December 31, 2009, on a non-cumulative basis.
Royalties from the surface mineable coal could exceed $3 million over several years, based upon current market prices and third party estimates of approximately 5 million tons of coal. There is approximately 860 thousand tons of "Blue Gem" quality surface mineable coal, according to the same third party estimates. Recent coal prices in this region of the U.S. have exceeded $100.00 per ton according to the Energy Information Administration. In addition, all of the oil and gas rights obtained by LC (current and future) will be assigned to CNSV on the following basis: 12.5% to the land owner; 1% total to the owners of the 50% equity in LC and the remaining 86.5% to CNSV.
"Utilizing a majority of restricted common shares and a smaller amount of cash for the acquisition of this 50% equity interest enables CNSV to continue its efforts to generate royalties through the development of energy resources believed to be situated on the 650 acres while allowing the sellers the opportunity to realize greater value from the sale of their fifty percent equity interest. We believe the transaction will provide long-term benefits to our shareholders," said Dr. Johnny R. Thomas, President/CEO of CNSV.
CNSV is engaged in the acquisition of organic and natural food companies in the food services industry. CNSV is also acquiring land for organic certification and grazing of beef, dairy and wild game on grass fed pastures, while also utilizing much of these acquired lands in connection with the Company's energy development plans in the near-term. The CNSV business model is unusual because it focuses on acquiring land to produce both food and energy. The Company intends to make energy resource recovery and organic/natural farming work synergistically, because modern recovery methods not only avoid damage to the land but also enhance arability.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this press release are forward-looking statements. Without limiting the foregoing, the words "believe," "anticipate," "plan," "expect," "seek," "potential," "estimate," and similar expressions are intended to identify forward looking statements. These statements relate to future events or to the Company's future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company's control which could, and likely will, materially affect actual results, levels of activity, performance or achievements.
Any forward-looking statement reflects the Company's current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. Such risks, uncertainties and other factors which could impact the Company and the forward-looking statements contained herein are included in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.