Canada’ s Morien signs MoU and off-take agreement for Donkin Coal project
Canada’s Morien Resources has finalised the terms of a letter of intent for a coal sales off-take agreement for the Donkin Coal project.
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The Donkin Coal project is an undeveloped underground coking and thermal coal project located in Cape Breton, Nova Scotia, Canada.
Morien has signed a memorandum of understanding (MoU) with an operating partner for the establishment of a joint-venture agreement to develop and operate the Donkin project, according to a company statement on Wednesday November 20.
On November 4, the company submitted an offer to Glencore Xstrata for the purchase of its 75% in the Donkin Project and Morien has subsequently entered negotiations with Glencore.
The letter of intent and MoU are conditional upon the purchase of the 75% interest in the Donkin Project that is currently owned by Glencore.
Glencore said on November 20 that during negotiations it will be minimising expenditure at the project. It indicated that this involves securing entries for a new operator.
“Morien views these actions by Glencore as an indication of its willingness to transition the project to new owners and Morien is confident Glencore would do nothing to damage the project given the advanced level of negotiations between the parties. Although there is no guarantee the current negotiations will end in a transaction,” said Morien in the statement.
Once developed the Donkin project will have the capacity to produce 2.75 million tpy of coking coal and thermal coal. It has access to a deep water port that will enable to receive capsize vessels for shipment overseas.