Africary And Leigh Creek Energy Sign A Heads Of Agreement

  • Jan 16, 2019 AEDT
  • Team Kalkine
Africary And Leigh Creek Energy Sign A Heads Of Agreement

On 16 January 2019, Leigh Creek Energy Limited (ASX: LCK) has announced that they have signed a Heads of Agreement (HoA) with South African based African Carbon Energy Pty Ltd (Africary).

Leigh Creek Energy Limited is under the energy sector. The Australian based company is currently developing its Leigh Creek Energy Project.

The HoA (Head of Agreement) will provide the framework which will be utilized for the negotiation of legally binding agreements: Lease Agreement, Sale & Purchase Agreement and the Service agreement (together the “Execution Agreements”). The finalization and signing of the Execution Agreements will give authorization to the company’s PCD plant and equipment at Leigh Creek, and it will be the first instance leased by the South African company Africary. It will also grant an option for Africary to buy Pre-Commercial Demonstration plant so that they can be used at its Theunissen underground coal gasification project which is in South Africa, and the company will provide advisory services to Africary.

Whenever the Execution Agreements get signed, the company will recover most of its engineering and plant costs of the Pre-Commercial Demonstration plant, and it will also be an early path for revenue.

As stated by LCK’s Managing Director Mr. Phil Staveley, that this Head of Agreement attracts the international interests in the Leigh Creek Energy Project and the undertaken due diligence shows the level of confidence in the company’s technical expertise, its operational competency, and capacity.

LCK’s General Manager Technical Mr. Justin Haines, recently visited annual workshop of South African UCG Association where he noticed that LCK’s project has significant support and attention. Mr. Johan Brand, Africary director recently visited Adelaide and Leigh Creek for evaluating LCK’s capability and its performance, adaptability. He also evaluated the commercial re-use potential of the Pre-Commercial Demonstration plant equipment. As a result of this Head of Agreement was negotiated.

Now LCK is internationally appreciated, and the company was approached by several parties so that they can get the same services. Africary is the first company to move to an HoA.

The primary objectives of the Africary for using LCK’s PCD equipment is to save significant time and money for a demonstration of its South African based project’s potential for power generation, and it will also help in minimizing the future project risk.

FY18 Financial Performance: The Company’s total comprehensive loss for the year stood at $6,018,850 in FY18, (over the prior year which was $5,758,760). The diluted loss per share for the year stood at 0.02 cents per share. On Balance Sheet front, Net Assets for the year stood at $25,382,215 in FY18, (over the prior year which was $13,827,468). As at 30 June 2018, the company had cash and cash equivalent of $9,323,648 (over the prior year which was $8,757,787).

Stock performance: The shares of Leigh Creek Energy Limited closed the day’s session at A$0.110 (16 January 2019), up by 4.762%. The market capitalization of the company stands at circa $50.63 Million with approximately 482.17 million outstanding shares. In the time span of the previous six and three months, the stock delivered the returns of -44.74% and -47.50%, respectively. During the last one month, LCK delivered the negative return of 16%.


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