TORONTO, Jan. 18 /CNW/ - Coalcorp Mining Inc. ("Coalcorp" or the "Company") (TSX-CCJ) announces that it has received a letter from counsel for Blue Pacific Assets Corp. ("Blue Pacific"), with whom the Company has a letter agreement dated September 27, 2005, as amended by a first addendum to letter agreement dated April 16, 2006 (collectively, the "Royalty Agreement") over the gross production of coal derived from that portion of the La Francia mine in the area consisting of Concession for Medium Mining Agreement No. 05160 ("Concession 5160"), advising Coalcorp that unless it receives (i) all books and records pursuant to its audit rights under the Royalty Agreement; (ii) payment of those royalties under the Royalty Agreement which Blue Pacific claims approximately $2 million are overdue; and (iii) confirmation that either the Proposed Transaction is not proceeding or that the prior written consent of Blue Pacific has been or will be complied with as allegedly required under the Royalty Agreement, in each case, by 5 p.m. on Wednesday January 20, 2010, then Blue Pacific shall commence proceedings (the "Proceedings") against Coalcorp, including seeking injunctive relief to prevent the completion of the Proposed Transaction.
As previously announced in a press release issued on January 7, 2010, certain subsidiaries of Coalcorp have entered into agreements to sell the La Francia mine and related infrastructure assets, including Concession 5160, and all of the issued and outstanding shares of Adromi Capital Corp., the holder of the La Francia II concession, to a subsidiary of the Goldman Sachs Group (the "Proposed Transaction").
As previously announced on September 29, Coalcorp commenced a legal action against certain former directors and officers and other parties. The Statement of Claim alleges, among other things, that the defendants participated or allowed Coalcorp to participate in improper transactions that were harmful to Coalcorp and its shareholders. Blue Pacific is one of the defendants in this action and the Statement of Claim alleges that Blue Pacific is controlled by certain former directors of Coalcorp. The validity of the Royalty Agreement and the circumstances in which it was entered into for the benefit of the former directors is one of the claims at issue in the Statement of Claim. Coalcorp disputes the validity of the Royalty Agreement and is of the position that it is not an enforceable agreement. Coalcorp is confident in its position and, if necessary, will vigorously defend the Proceedings.
Coalcorp continues to believe that the Proposed Transaction is in the best interest of the Company and its stakeholders. Coalcorp does not intend to comment further on these matters unless a material development occurs which requires disclosure.
Coalcorp is a coal mining, exploration and development company with interests in the La Francia coal mine and related infrastructure projects and a number of coal exploration properties, all located in Colombia. Coalcorp also holds a 60% equity interest in Carbones Colombianos del Cerrejon which owns the La Caypa coal mine in Colombia. Further information can be obtained by visiting our website at www.coalcorp.ca or under the Company's profile at www.sedar.com.
Forward Looking Statements Disclaimer
Statements made in this news release may be forward-looking and therefore subject to various risks and uncertainties. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Coalcorp does not undertake to update any forward-looking statements; such statements speak only as of the date made.
SOURCE Coalcorp Mining Inc.
For further information: For further information: Juan Carlos Gomez, Interim Chief Executive Officer, +57-1-658-5050 Ext: 9990