VANCOUVER, Aug. 7 /CNW/ - Compliance Energy Corporation (the "Company")
announces that it has recently signed a binding memorandum of understanding
("MOU") for the sale of 100% of the Company's interest in the Basin Coal Mine
located near Princeton, BC for consideration of cash and shares totaling Cdn
$8 million.
Under the terms of the MOU, NWPC Pty Ltd ("NWPC"), a private Australian
company, has agreed to purchase the Company's interest in the mining agreement
under which the Company has the right to mine coal at the Basin Coal Mine as
well as all remaining assets of the Mine including the 400,000 tonne per year
wash plant for $4 million in cash and $4 million in shares of a public
Australian Company. On signing the MOU NWPC made a nonrefundable payment of
$75,000 which entitles them to an exclusive period of six weeks to conduct due
diligence. NWPC may extend this due diligence period for a further six weeks
by making an additional nonrefundable payment of $75,000. Once the due
diligence period is completed, NWPC are required to make a purchase price
installment of $125,000 ("Purchase Installment"). This Purchase Installment is
nonrefundable if the transaction contemplated by this MOU does not close by
October 31, 2007. The closing of the transaction contemplated by this MOU may
be extended to December 31, 2008 by NWPC making an additional delay payment of
$200,000. On closing, NWPC will pay the balance of the $4 million purchase
price less the Purchase Installment if applicable and the $4 million in shares
of a public Australian Company. The shares of the public Australian Company,
which may be subject to escrow, will be issued equally on the following
milestone dates: 25% upon closing, 25% upon completion of a feasibility study;
25% upon commencement of production; and 25% upon production of 500,000 tonnes
of saleable coal from the Basin Coal Mine.
Completion of the transaction contemplated by this MOU will allow the
company to focus its activities on the Raven and Bear coal deposits on
Vancouver Island. Discussions on a potential JV to develop the Vancouver
Island properties are progressing well, and the Company anticipates that it
will complete definitive agreements by the end of August, 2008.
Compliance Energy Corporation's shares trade on the TSX Venture Exchange
under the symbol CEC and investor information is available on the Company's
web page at www.complianceenergy.com.
On behalf of the Board of
COMPLIANCE ENERGY CORPORATION
John Tapics
Chief Executive Officer
The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
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Note: This release contains forward-looking statements that involve risks
and uncertainties. These statements may differ materially from actual
future events or results. Readers are referred to the documents, filed by
the Company on SEDAR at www.sedar.com, specifically the most recent
reports which identify important risk factors that could cause actual
results to differ from those contained in the forward-looking statements.
The Company undertakes no obligation to review or confirm analysts'
expectations or estimates or to release publicly any revisions to any
forward-looking statements.
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