re: News: Cougar in Strategic UCG Alliance wi... Hunt pays off...

re: News: Cougar in Strategic UCG Alliance wi... Hunt pays off for Cougar
Hunt pays off for Cougar:

Friday, 1 October 2010

COUGAR Energy has signed a $5 million strategic alliance with a Chinese investment group that allows the company to expand its underground coal gasification business in China.


The company signed a terms sheet with Shanghai Limitedless Investment Group Australian subsidiary Limitedless International Holdings after saying it was considering a proposal to form a strategic alliance with an investor group to develop UCG projects earlier this week.

Under the deal, LIH will initially invest $1 million in Cougar through the take up of shares at 3.5c per share, with the proceeds to be received by the end of October.

The Chinese investor will then take up a further placement of Cougar shares to the value of $1 million once a definitive cooperation agreement has been signed.

Cougar and LIH will negotiate a definitive cooperation agreement by January 31, 2011 to set out the arrangement to work jointly to develop and operate UCG projects in China.

The terms of the agreement will allow both companies to form a joint venture entity in which LIH will contribute initial seed capital of $3 million to the JV company and access its Chinese coal leases for review as potential UCG projects.

The deal is welcome news for Cougar, which has been trying to consolidate its financial position after it hit road blocks with its Kingaroy UCG project in Queensland.

Cougar managing director Len Walker said the deal was another significant milestone in the companys plan to expand its UCG business in China.

He said the privately-owned SLI group had great enthusiasm for promoting and commercialising UCG in China.

We are impressed by its preparedness to back this enthusiasm through investing at the company level and providing critical seed funding to accelerate project development in China.

Walker will be travelling to western China later this month to join SLI in assessing a series of sites for potential UCG projects.

The SLI Group is actively involved in a number of investment activities including the mining industry in western China.

The group also has investments in coal, gold and base metals projects in that region and offshore interests predominantly in Australia.