The agreement will be in place until June 5, 2021 and requires Sloane to exploit a minimum of 4,200,000 tonnes of coal during this time.
As part of the agreement, Sloane will be responsible for the mine’s thermal coal production, commercialization and associated costs and Sloane will be entitled to receive and commercialize a percentage of the coal production, to cover, among other things, the mine operating cost. Norcarbon will be entitled to the remaining percentage of production, which will be sold to Sloane at a set price. The set price may be adjusted as a result of changes in the stripping ratio at the mine and international coal market prices.
The agreement further contemplates that Sloane will provide Norcarbon with an advance payment for the purchase of the future coal production which it is entitled to. Sloane, will also sell to Norcarbon a certain amount of coal enabling the company to continue to meet its’ commercial commitments.
Sloane’s operation of the Cerro Largo mine is expected to commence in October 2014.
