TSX-V TRADING SYMBOL: CEC
VANCOUVER, Feb. 1 /CNW/ - Compliance Energy Corporation (the "Company")
announces that it has signed an exclusive Memorandum of Understanding ("MOU")
with ITOCHU Corporation and LG International Corp. ("the Parties") for the
development of the Raven Coal Project located on Vancouver Island. Under the
terms of the MOU the Parties will make an initial payment of $600,000 to
secure exclusivity in the project and subject to the favourable outcome of due
diligence will fund the next $5.4 million in payments to earn up to a
50% interest in the Raven Coal Project. The $5.4 million will be spent as
follows: $2.4 million to complete the purchase of the property and up to
$3.0 million for environmental assessment studies and a bankable feasibility
study. The MOU provides for a due diligence period up to May 31, 2008 at which
time the Company and the Parties expect to have definitive agreements signed.
ITOCHU Corporation is a major Japanese trading house and, among other
things, has extensive experience in the development of coal mines and the
marketing and sale of coal globally and has investments in coal mines in
Australia and Indonesia. ITOCHU had annual revenues of $22 billion US and Net
Income of $1.5 billion in the fiscal year ended March 2007.
LG International Corp. is a leading general trader in Korea with a
worldwide overseas branch network and has abundant experience in coal mining
development and the marketing and sales of coal worldwide. LG International
Corp. has annual revenues of $5.8 billion US and investments in coal mines in
Russia, Australia, and Indonesia.
The Raven Coal Project located in the Comox Coal Basin of Vancouver
Island, British Columbia covers an area of approximately 3100 hectares and has
39,093,000 tonnes of measured and indicated and 59,004,000 tonnes of inferred
coal resources as reported in the Company's technical report prepared by O.R.
Cullingham Resource Consultant Ltd. (see press release May 29, 2007). The coal
is classified as high volatile A Bituminous and is suitable for targeting the
metallurgical coal market as a blend product or the thermal coal market. The
Company recently completed a positive Preliminary Assessment Report on the
Raven Coal Project. In the report, Associated Geosciences Ltd. of Calgary
("AGL") studied two production cases: one producing 823,000 tonnes of high
volatile metallurgical coal per year and another producing 1,440,000 tonnes of
thermal coal per year. Based on these studies AGL believes that the Raven
Property warrants additional exploration and a feasibility study to form the
basis of a production decision and that the estimated net present value of the
project at a constant dollar discount rate of 12% is $105.6 million. AGL's
Preliminary Assessment was prepared by Peter Cain Ph.D., P.Eng. and Alan
Craven P.Eng. who are the Independent Qualified Persons for reporting purposes
as defined in NI 43-101Standards of Disclosure for Mineral Projects.
Compliance Energy Corporation's shares trade on the TSX Venture Exchange
under the symbol CEC and investor information is available on the Company's
web page at www.complianceenergy.com.
On behalf of the Board of
COMPLIANCE ENERGY CORPORATION
Chief Executive Officer
The Preliminary Assessment is preliminary in nature and includes inferred
coal resources that are considered too speculative geologically to have
economic considerations applied to them that would enable them to be
categorized as coal reserves and there is no certainty that the Preliminary
Assessment will be realized. Coal resources that are not coal reserves do not
have demonstrated economic viability.
The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Note: This release contains forward-looking statements that involve risks
and uncertainties. These statements may differ materially from actual future
events or results. Readers are referred to the documents, filed by the Company
on SEDAR at www.sedar.com, specifically the most recent reports which identify
important risk factors that could cause actual results to differ from those
contained in the forward-looking statements. The Company undertakes no
obligation to review or confirm analysts' expectations or estimates or to
release publicly any revisions to any forward-looking statements.
For further information:
For further information: Rob Roney, Investor Relations, at (250)
897-0437; or Rod Shier, CFO, at (604) 689-0489