FOYSON Resources has taken full ownership of the Amazon Bay iron sands project and will also take over energy group Integrated Green Energy (IGE) in a major expansion for the company.
Foyson will issue shares representing roughly 60.9 per cent of its total issued capital to acquire the company, which holds licences for plastics to fuel conversion, biomass to fuel conversion and biomass to energy conversion.
IGE also owns a plastics to diesel and petrol conversion plant in the Sydney suburb of Berkeley Vale, alongside its management team and feedstock contracts.
Foyson signed the agreement with IGE in March, saying it would move to bring its technologies – which allow for the conversion of non-recyclable plastics into on-road fuels – to Papua New Guinea.
Foyson said the biomass power technology is applicable to service remote rural communities and remote industrial developments such as Amazon Bay, at a much lower cost in addition to also providing local employment and infrastructure.
The company said it held preliminary discussions during the quarter with the PNG Government to introduce the IGE power generating technologies to the country.
The deal is subject to shareholder approval, with an extraordinary general meeting planned for late July.
Announced in the March quarterly report, Foyson intends to undertake a placement and rights issue, with the placement outlined as a placement of shares plus one free attaching option per share to sophisticated investors to raise about A$3 million.
The rights issue is of one share for every 10 shares held at the record date to raise about A$1.25 mi l lion.
Fundraising activities will only take place if shareholder approval for the IGE Transaction is received, Foyson said.
Funds raised under the placement and rights issue will be used to expand the capacity of the commercial plant and for general working capital purposes.
Foyson also announced during that quarter that it had taken full ownership of the Amazon Bay iron sands project in Papua New Guinea after fully acquiring project developer Titan Mines.
The company announced in March that it had acquired the 50% of shares in Titan that it did not own, giving it total ownership in Exploration Licences 2149 and 2281 and a 90% stake in EL 1396.
Foyson acquired the company for an undisclosed cash sum as well as a commitment to pay a royalty from proceeds of any production from the project.
The two parties have agreed to terminate all existing agreements including the Amazon Bay Option Agreement over the project.
The new arrangements remove Foyson’s prior obligations to pay both the outstanding option fee of A$300,000, the option exercise consideration of A$10 million and the issue of new shares equivalent to 2.16% of the total issued capital in the company.
A new royalty deed has been entered into by the parties where the 0.50% royalty is calculated on the gross revenue actually received by Titan from the sale or disposal of minerals extracted from exploration licences 1396, 2149 and 2281, exploration license applications 1643 and 2280 and any other granted over any part of or adjacent to those licences, Foyson reported.
Foyson managing director Mike Palmer said the purchase was consistent with the company’s strategy of leveraging its experience and knowledge of working in PNG for the benefit of shareholders.
“The acquisition reflects the company’s commitment to PNG and provides significant flexibility in maximising the value of the Amazon Bay iron sands project,” he said.