TMK to Fully Acquire Talon's Ownership in Mongolia CSG Project www.ringzone.com
TMK Energy Ltd is acquiring the remaining 33 percent stake of Talon Energy Ltd in the Gurvantes XXXV Coal Seam Gas Project in the South Gobi Basin of Mongolia for full ownership of the asset.
TMK and Talon have executed a binding heads of agreement in which TMK will retain ownership of Talon’s 33 percent earned interest in the Gurvantes XXXV project via the acquisition of Talon’s wholly owned subsidiary, Talon Energy Pte. Ltd in a stock and cash transaction.
The proposed acquisition remains subject to both Talon and TMK shareholder approval, targeted for late November. The acquisition is subject to all parties obtaining the necessary corporate, governmental, regulatory, and third-party approvals, consents, and waivers. The transaction completion is expected in early December, TMK said in a statement Wednesday.
The consideration for Talon’s earned rights is up to 1.1 billion fully paid ordinary shares in TMK and up to 550 million listed options in TMK on the same terms as that of the TMK options that currently trade under the ticker TMKOB, exercisable at $0.016 (AUD 0.025) on or before April 30, 2026, according to the statement.
TMK currently owns 67 percent of the Gurvantes XXXV project, which covers an area of 3,243 square miles (8,400 square kilometers) and is in what is considered one of the most prospective coal seam gas basins globally, the company said. The project is located near the Chinese-Mongolian border and is close to the extensive Northern China gas transmission and distribution network and to several large-scale mining operations with high energy needs.
Approximately 90.982 million TMK shares and approximately 45.491 million TMK listed options will be retained by Talon, some of which may be distributed to Talon's advisers to satisfy certain transaction costs resulting from the transaction, with the amount to be determined at the sole discretion of the Talon board.
Under the transaction, Talon is to commit up to $545,600 (AUD 850,000) in cash to satisfy Talon’s obligations to contribute to any funding for expenditure or other commitments under Gurvantes XXXV‘s project agreements.
“After extensive discussions and negotiations with Talon, we are pleased to have reached a binding agreement that consolidates 100 percent of the ownership of our flagship asset within TMK”, TMK Energy CEO Brendan Stats said. “Our most recent operations update confirmed that the Gurvantes XXXV Project Pilot Well Program remains firmly on track and is continuing to meet our expectations, with gas rates and water production all pointing towards a successful long-term test result.”
“Consolidating 100 percent ownership under one well-funded ASX [Australian Stock Exchange]-listed entity provides TMK with full control and flexibility to maximize the value of the Gurvantes XXXV Project for the existing TMK shareholders and the new TMK shareholders from Talon. The proposed transaction has been structured in a way that is highly value accretive for existing TMK shareholders through the consolidation of 100 percent of the project with minimal dilution and provides the incoming Talon shareholders with a zero-cost exposure to the enormous potential of the Gurvantes XXXV Project”, Stats added.
TMK’s largest shareholder Tsetsen Zantav, who has a relevant interest of approximately 32.06 percent, has confirmed that he intends to vote in favor of the Transaction at the upcoming TMK shareholder meeting, the company said in the statement, adding that each TMK director is also in favor of the transaction.
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Published Date:2023-10-11