HeZhang is an ideal location with a rich resource base, infrastructural support, and positive sentiment for further development. LLEN was even recently hailed by the HeZhang County Government for the proximal Weishe Mine, noted by the local government as being a model mine after the June 5 tour of the facilities (attended by the County Secretary, Huang Guangjiang). From the safety techniques employed to the implementation of advanced mining technologies, LLEN won high praise and the endorsement will prove quite beneficial to the company’s consolidation strategy for HeZhang.
Chairman and CEO of LLEN, Dickson Lee, emphasized the importance of this deal and the acquisition of Lashu as an important part of the regional consolidation strategy. Lee explained to investors that the company was actively working with Union and others to identify, aggress, and execute on yet more opportunities in China like the one discussed today, confident that the organizational focus LLEN brings to the table will produce revenues that shareholders can be proud of.
Today’s announced MOU will give the company a 51% controlling interest. This is a particularly good win for the company as, alongside the glowing endorsement of LLEN’s job with Weishe by local officials, this repeat transaction with Union Energy shows real confidence in L & L Energy’s operational prowess. This MOU thus represents very good momentum for the company’s regional strategy and as production (which is scheduled to kick off in fall of this year) ramps up at Lashu, a key piece of the overall resource puzzle for HeZhang falls into place.
Without the kind of oil and natural gas reserves the US has, China finds itself increasingly reliant upon coal, with some 70% of energy coming from the sector alone. But while China has abundant coal reserves, the infrastructure and management required to exploit it is lacking, even as demand also increases from other sources like the steel/iron industry that require more and more coking coal to sustain growth. This underlying dynamic is a strong fundamentals driver for LLEN and the company is well-positioned to deliver substantial shareholder growth via development of Chinese coal.
Full production at Lashu is projected for 2013 and the rich, high-BTU anthracite coal (low sulfur content) should be pumping out of there at the approved annual rate of some 300k tons (from 7.17M tons of reserves), a figure which may be expanded to 450k or higher (as reconnaissance indicates potential resources of some 20M tons).
The company will hand over a deposit of $314k as part of the deal, paying the remainder (not yet finalized) of the balance via periodic installments which are mapped out in the language of the definitive agreement. It is a win-win situation for LLEN and Union, as the site will see a massive infusion of enhanced mining capabilities, administrated under the company’s expert supervision.
Chinese coal has a strong future and LLEN is at the leading edge of the wave.
For more information on L & L Energy, Inc., head on over to the company’s website at: www.LnLInternational.com
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