Wasabi will invest $C2.5 million ($A2.7 million) by December 2008 and will have the right to earn up to 50% of the thermal coal project. The company will earn 5% in the joint venture for each $C250,000 spent.
“The demand for energy continues to escalate and Wasabi will search for strategic investments in energy-related businesses to create shareholder value,” Wasabi director Tim Wise said.
WCCC chairman John Byrne said the joint venture provided the necessary capital to progress the development of Lillyburt.
WCC will conduct exploration to confirm the coal deposit’s quality and volume estimates and to determine the economic potential of the project.
During the early 1980s, Shell Canada undertook exploration on the project, identifying a deposit of thermal coal. The work included thirty-three drill holes totalling 6278m, and numerous trenches. Five potentially mineable seams were identified in a setting suitable for starting an open pit operation.
The deal is subject to shareholder approval, which Wasabi will seek next month.
Meanwhile, Wasabi has appointed Bob Reynolds and Robert Vallender to its board.
Mining engineer Reynolds has more than 30 years experience in Australia and overseas in coal marketing, mining management and engineering. Now in a consultancy role, Reynolds has past experience with Southland Coal, Oceanic Coal and BHP.
Vallender has 30 years of management and new technology product development experience in Australia and North America, specialising in Australian and European iron and steel and primary metals industries.
