Change of Subsoil Use Contract Terms Approved
17.06.2010
SUNKAR RESOURCES PLC
("Sunkar" or the "Company")
Change of Subsoil Use Contract Terms Approved
Sunkar Resources plc (AIM:SKR) is pleased to announce that it has received the consent of the Government of the Republic of Kazakhstan to change the Company’s work programme (the “Work Programme”) commitments under its Subsoil Use Contract (“SUC”) to develop the Chilisai phosphate deposit.
The changes to the Work Programme’s ore extraction commitments are as follows:
|
Ore Extraction (‘000 tonnes) |
||
|
Years |
Current |
Revised |
|
2010 |
5,000 |
1,000 |
|
2011 |
5,000 |
1,000 |
|
2012 |
10,000 |
1,000 |
|
2013 |
10,000 |
2,000 |
|
2014 |
10,000 |
5,000 |
|
2015 |
10,000 |
5,000 |
|
2016-2031 |
10,000 |
10,000 |
In conjunction with these changes, the financial commitment of US$115 million associated cumulative development expenditure has now been extended from 2014 to 2020.
Serikjan Utegen, CEO of Sunkar, commented:
“This is tremendous news for Sunkar. The Government has given an overwhelming endorsement for Sunkar’s plans to develop a world scale, low cost integrated phosphate fertilizer manufacturing facility. High value fertilizer production for domestic consumption and export will have a significant impact on the local economy and will contribute to meeting the country’s industrial policy aims for diversification and low cost competitive production of high value added products to enhance export growth.
The Government support aligns our Subsoil Use Contract with the overall Project timetable allowing us to proceed with confidence.”
Sunkar, through its wholly owned subsidiary Temir Service LLP (‘Temir Service”), is committed to developing a 10 million tonne per annum mine. In December 2009, Temir Service submitted a revised overall work programme to the Kazakhstan Ministry of Industry and New Technologies (“MINT” or the “Ministry”), the competent body for mining in Kazakhstan, to change the ore extraction commitments under Temir Service’s SUC in order to align the mine development with Sunkar’s planned construction of a phosphate fertilizer complex. MINT has confirmed their decision to accept an amended Work Programme and to revise the terms of the SUC accordingly.
Although the formal revision of the terms of the SUC is still in process, the Directors have received legal advice that the formal revision process of the SUC is now procedural.
Since late 2009, Temir Service’s Direct Application Rock (“DAR”) project has been included in the Kazakhstan’s State Industrial Development Programme, a major Government support initiative in the country. Sunkar has applied to include its phosphate fertilizer project in this programme. Such governmental initiatives further demonstrate the state’s continued support for and commitment to the mining and manufacturing (processing) industries in Kazakhstan.
For further information please contact:
Sunkar Resources plc
Serikjan Utegen, CEO Tel: +44 20 7930 8678
Donald Sinclair, CFO
Canaccord Genuity Limited
Andrew Chubb Tel: +44 20 7050 6500
Bhavesh Patel
GMP Securities Europe LLP
James Cassley Tel: +44 20 7647 2800
Bankside Consultants
Simon Rothschild Tel: +44 20 7367 8888
Louise Mason
Editors Notes
Sunkar Resources plc
Sunkar Resources plc, through a wholly owned subsidiary Temir Service LLP, operates a phosphate rock mine in Aktobe Oblast, North West Kazakhstan. Temir Service LLP holds a Subsoil Use Contract to part of the Chilisai Phosphate Rock Deposit. The contract area is estimated to contain 800 Mt of phosphate ore.
Sunkar's strategy is to build a world class integrated ammoniated phosphate fertilizer plant with low operating costs. Sunkar's low cost base derives from its near surface phosphate rock deposit, access to sulphur from the nearby North Caspian oil and gas fields and regional long-term marginal priced gas.
The Chilisai Phosphate Rock Deposit is ideally located on a transportation hub that spans the agricultural markets from Western Europe through to China.