Re:Lysander has three-month option on Verticalnaya owner
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Lysander has three-month option on Verticalnaya owner
2009-05-25 16:23 ET - News Release
Mr. Bryce Porter reports
ADDITIONAL IMPROVED OPTION AGREEMENT VERTICALNAYA ANTHRACITE MINE
Lysander Minerals Corp. has entered into a three-month option agreement under which it may acquire 49 per cent of Skhidna Vugilna Kompania LLC of Ukraine, the owner of the Verticalnaya mine. Lysander also holds an option to acquire Ukraine Energy Ltd. of Ukraine, the 51-per-cent owner of East Coal. A previous agreement under which Ukraine Energy Ltd. could acquire the 49-per-cent interest for higher consideration is suspended and will be terminated on exercise of the option.
To exercise the option, Lysander will issue five million common shares and an unsecured three-year, convertible $3-million (U.S.) debenture. The debenture may be converted by the holder into eight mllion common shares of Lysander at any time. Interest will be 2 per cent over Libor. There will be a $100,000 (U.S.) advance payment of interest. To maintain its option, Lysander will make monthly advances to East Coal in respect of budgeted expenses at the mine.
A technical report dated September, 2008, on the Verticalnaya mine is available on SEDAR and on the Lysander website. Lysander intends to develop Verticalnaya as expeditiously as possible, subject to constraints affecting capital markets.
Key data for Verticalnaya mine
Key project indicators from the September, 2008, technical report are as follows:
Initial capital expenditures: $237.8-million (U.S.)
Net present value at 12 per cent: $352.1-million (U.S.)
Internal rate of return: 35.2 per cent
Average cash operating cost per saleable tonne: $31.19 (U.S.) per tonne
Pay back period: Seven years
Proven reserves: 16.2 million tonnes
Probable reserves: 11 million tonnes
Measured resources: 57.3 million tonnes
Indicated resources: 18.9 million tonnes
Total resources: 76.2 million tonnes
Resources are inclusive of reserves.