Business
Related Party Transaction
Related Party Transaction.
About this update from Griffin Mining Limited
[{"type":"text","content":"\n RNS Number : 0351I Griffin Mining Ld 13 November 2008 \n \nGRIFFIN MINING LIMITED\n60 St James's Street, London SW1A 1LE, United Kingdom\nTelephone: + 44 (0)20 7629 7772 Facsimile: + 44 (0)20 7629 7773\nE mail: [email protected]\n\n13 November 2008\n\nPURCHASE OF 39% INTEREST IN SPITFIRE OIL LTD\n\nRELATED PARTY TRANSACTION\n\nGriffin Mining Limited ('Griffin' or the 'Company') announces that it has agreed to purchase 16,666,667 ordinary shares in Spitfire Oil Ltd ('Spitfire'), representing a 39.2% interest in the issued share capital of Spitfire, at 15p per share for a total cash consideration of £2,500,000 from Citadel Equity Fund Ltd ('Citadel').\n\nBackground on Spitfire*\n\nSpitfire was incorporated on 2 May 2007 and on 11 July 2007 acquired the entire issued capital of Spitfire Oil Pty Ltd (formerly Hurricane Fuels Pty Ltd) by way of a share swap. On 18 July 2007, Spitfire's shares were admitted to trading on AIM under the ticker 'SRO'. At the same time, Spitfire placed 16,666,667 new Ordinary Shares with Citadel at 60p per share to raise £10,000,000 (before expenses).\n\nSpitfire's principal activity is the pursuance of the production of fuel oil and distillate from the Salmon Gums Lignite deposits in Western Australia. Spitfire controls 6 exploration tenements totalling 519 km2 near Salmon Gums, near Esperance, in the south east of Western Australia. As reported in Spitfire's Admission Document dated 13 July 2007 ('Admission Document'), the tenements contain a large lignite (brown coal) deposit with a JORC Inferred Resource (>10m thick seam) of 500 million tonnes of lignite. The lignite has a high Kerogen (hydrocarbon) content which, based on Spitfire's testwork, on a limited number of samples, indicates that oil may be recoverable from the deposit at an average yield of approximately 69 litres per tonne of lignite (in situ) or 0.43 barrel per tonne. This implies a potentially recoverable fuel oil resource of approximately 200 million barrels (or 33 billion litres) throughout the deposit. Salmon Gums is located next to a main road, railway and pipeline connecting Kalgoorlie and the port of Esperance. \n\nIn the period from incorporation to 30 June 2008, Spitfire reported a loss before tax of A$2.8m and net assets of A$16.6m including cash balances of A$14.1m equating to £6.8m or 1...