Under the terms of the LOI, a private Australian company will procure all of the outstanding shares of Challenger’s wholly-owned subsidiary PT Bestindo Energy which holds all of the corporations rights to the Barito project.

The LOI purchase price includes $2m payable as to $50,000 on signing of the LOI, $100,000 on signing the formal Conditional Share Purchase and Sale Agreement (CSP&SA), $150,000 within 60 days of signing the CSP&SA, $500,000 on preliminary forestry permit approval for the project and $1,200,000 on final approval of the forestry permit and commencement of commercial production.

A royalty of $2 per ton on all coal produced will be granted to Challenger from the project lands and from lands within a 2km area of interest surrounding the project lands in which the purchaser may acquire further coal rights.

The purchaser has assumed responsibility for all ongoing expenses, effective immediately, of PT Bestindo Energy and the Barito project.