DONKIN — There may be a light at the end of the Donkin mine. Xstrata Coal officials confirmed Wednesday the company is in discussions with Morien Resources Corp. about purchasing Xstrata’s 75 per cent interest in the mine. Morien Resources has a 25 per cent interest in the Donkin coal project.
“We have had some initial discussion, and with all commercial transactions there will be ongoing discussions between ourselves and Morien,” said Val Istomin, Xstrata business development manager.
However, Istomin said the Donkin mine remains up for sale in the meantime. “We haven’t stopped the sale process,” he said.
“At the end of the day all we want to do is exit this asset and hand it on to new people and they can continue on to the process. “If another company comes along and wants to buy the mine, we will be happy to talk to them about that.”
Xstrata Coal had recently issued a statement that it was unable to find a third-party buyer for its 75 per cent stake in the Donkin coal project. When the Cape Breton Post contacted Morien Resources Corp. for comment, president and CEO John Budreski issued a press release announcing the company’s intention to purchase Xstrata’s share.
The release stated Morien Resources had been designing a strategy regarding the sale of Xstrata prior to Xstrata’s April 26 announcement of its intention to sell.
“This recent development was anticipated and incorporated into that strategy,” the release stated.
“Morien Resources has been working with prospective operating, marketing, coal purchasing and financial partners. Morien and its team will now vigorously pursue this path for the purchase of Xstrata’s 75 per cent interest.”
In April, Xstrata Coal Donkin Management Ltd. and Erdene Resource Development Corp. announced that Xstrata was seeking an operating coal company to assume its interest in the Donkin project by the end of 2012.
In November, Erdene transferred its 25 per cent interest in the Donkin project to its subsidiary, Morien Resources Corp., and subsequently distributed those shares to Erdene shareholders.
Istomin said Australia-based mining company Xstrata decided to sell its interest in the Donkin mine because of a change in company policies.
“It is a very valuable asset and will be a great little mine.”
However, Istomin said it is only one mine and that in the past four or five years Xstrata has been combining three or four mines together in complexes.
“You share one office facility, one coal preparation plant, one railroad and one senior management,” he said.
For the rest of this article, please go to the Cape Breton Post website: http://www.capebretonpost.com/News/Local/2013-03-20/article-3204411/Morien-Resources-Corp.-interested-in-purchasing-Donkin-mine/1