The agreement also includes certain key amendments to the current agreement that governs the relationship between the company and the mining contractor.
The ammendments include: Coalcorp is granted the option for an early termination of the mining contract upon completion of a buyout mechanism, which would be exercised by providing notice to the contractor at any time after April 1, 2010, and would be effective following three months of such notice; Coalcorp would have the option to assume the lease agreements in respect of, or to acquire, contractor equipment that is essential for the operation of the mine, upon termination of the mining contract; both the parties have mutually waived and settled any actual, threatened or future claims in connection with the mining contract resulting from events occurring prior to the date
hereof; and a management committee with senior representatives from the company and the mining contractor has been established and is designed to improve communication between the company and the mining contractor.
A Memorandum of Understanding (MOU) previously signed between both the parties to regulate the incorporation of key equipment into the operation of the La Francia mine has been superseded by this new agreement and the mining contractor has agreed to maintain equipment in the mine.
Coalcorp has interests in the La Francia coal mine and related infrastructure projects and various coal exploration properties, all located in Colombia. Coalcorp also holds 60% equity interest in CCC which owns the La Caypa coal mine in Colombia.
