The Directors of Regal Resources Limited (RER) are pleased to announce that it has signed Farm-In Agreement with Greenpower Energy Limited (GPP) through its owned subsidiary MOL Gippsland Pty Ltd (MOL). The Farm-In Agreement is conditional upon the successful renewal of Exploration Licence which is due to expire in August 2010. The Exploration Licence Area is close to existing infrastructure within the heart of Gippsland coal region of Victoria. The objective of the farm-in is to establish the existence of a reserve of coal / carbonaceous material sufficient to support a commercial operation of the Underground Coal to Liquids process. Regal has recently announced it has received approval from the Victorian Department of Primary Industries (DPI) and the Victorian Environment Protection Authority to conduct a proposed Pilot Test to prove the UCTL process which will commence in Q1 2010. The approval was a key milestone for Regal and was the culmination of 12 months of design and planning and extensive consultation with regulatory
The key terms of the Agreement are: Regal has the right to earn a 70% interest in the Exploration Licence through the Regal has the right to earn a 70% interest in the Exploration Licence through the funding of the Agreed Work Plan, estimated to be approximately $1.5 million The earn-in commences upon the successful renewal of Exploration Licence 4860, with Greenpower and MOL working together to secure the licence renewal and determine the Agreed Work Plan MOL will receive a 10% royalty and $1 million repayment of their technical expenditure out of expected future production flows from the tenement MOL to fund the Rehabilitation Bond with the DPI MOL to pay Greenpower an amount of the first year’s work plan expenditure (to be held in trust) to be offset as work is performed MOL has conditionally agreed to assign half of its interest to a third party which is in process of acquiring rights to technology that has the potential to convert lignite methane “in-situ”. It is proposed such technology would be made available via sub-license to the joint venture.
Greenpower Energy is an ASX listed company and its primary focus is to evaluate Coal Seam Gas or Coal Seam Methane in its approximately two million hectares of commercially-attractive tenements the Gippsland and Otway Basins in Victoria, the Eromanga and Willochra Basins in South the Perth Basin in Western Australia and the Gunnedah Basin in New South Wales. The Directors of Regal believe that partnership with Greenpower is in line with its corporate mission securing exposure into significant lignite deposits and becoming an international provider intellectual property for the commercial application of the UCTLA.