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Following on from our story this morning, Cougar Energy Ltd (ASX:CXY) has announced a strategic alliance with a Chinese investment group for the development of underground coal gasification projects.
The deal struck with Limitedless International Holdings, the Australian subsidiary of China's Shanghai Limitedless Investment Group, will include a capital injection for Cougar.
The Chinese company will take up a placement of Cougar shares valued at $1 million at a price of 3.5 cents a share, the proceeds of which Cougar will receive by the end of this month.
The two companies will also negotiate a definitive cooperation agreement by January 31, 2011 which will set out the arrangement to work jointly to develop and operate underground coal gasification projects in the People's Republic of China.
Once the definitive cooperation agreement has been entered into Limitedless International Holdings will take up a further placement of Cougar shares at the same price to the value of $1 million.
The definitive cooperation agreement will see Cougar contribute operational and technical knowhow and Limitedless contribute seed capital initially expected to be $3 million and access to its Chinese coal leases for review as potential UCG projects.
Cougar Energy reported a loss of $4.15 million for the 2010 financial year.
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