Marathon Resources Ltd

Published : March 03rd, 2015

Marathon Signs Share Sale Agreement to Acquire LCEP

( 0 vote, 0/5 ) Print article
  Article Comments Comment this article Rating Follow Company  

Marathon Signs Share Sale Agreement to Acquire LCEP

T +61 (0)8 8348 3500

F +61 (0)8 7225 6990

ABN 31 107 531 822


3rd March 2015


Marathon Resources Limited ("Marathon") is pleased to announce that it has today signed a Share Sale Agreement to acquire ARP TriEnergy Pty Ltd ("TriE") which owns the Leigh Creek Energy Project ("LCEP").
The signed agreement, which follows Marathon's announcement of 7th January 2015, is subject to regulatory approval and shareholder approval at an Extraordinary General Meeting ("EGM") to be called to consider the transaction.
After the completion of due diligence, the Board agreed to sign the Share Sale Agreement to acquire 100% of TriE. In assisting the Board to make this decision the Board has completed satisfactory due diligence investigations, including receipt of input from third party consultants in relation to the technical and economic viability of In Situ Coal Gasification ("ISG") technology.


At the recent Marathon AGM held on the 20th November 2014 we outlined that a small number of investment opportunities were being assessed for possible involvement by Marathon. All opportunities, except the LCEP, have now been abandoned. Your Board considers the LCEP an outstanding low risk opportunity and one which is fairly priced.

Share Sale Agreement Summary

Under the Share Sale Agreement Marathon has agreed to acquire 100% of TriE from its current shareholders ("Vendors") in return for issuing 138,311,683 new ordinary shares in Marathon (being 60% of the total expanded capital base) to the Vendors.
The proposed acquisition is subject to:
1. regulatory approvals (including ASX approval in relation to Marathon's re- compliance with Chapters 1 and 2 of the ASX Listing Rules; relevant Ministerial approvals regarding any dealing with the LCEP tenements and FIRB approval); and
2. various Marathon shareholder approvals.
As shareholders are aware, TriE currently holds 19.99% of the issued capital of Marathon. Under the terms of the Share Sale Agreement, and in order to ensure that Marathon can comply with the restrictions in the Corporations Act in relation to self-acquisition, the parties have agreed that, within a 12 month period following completion, all Marathon shares held by TriE will be disposed of on its behalf by a custodian to be appointed.

Doc ID 272409023/v1

The LCEP Project

The LCEP is located at Leigh Creek in central South Australia approximately 550km north of Adelaide, over and around the existing coalfield (which is owned and operated by Alinta Energy). The LCEP is contained within the recently granted PEL 650, itself contained within the area of PELA 647 (both held by TriE).
The LCEP proposes to develop an ISG process at depth (300m - 1,500m) using standard oil industry technologies, such as directional drilling. ISG facilities operate by drilling two opposite sides of an underground coal seam. One well injects air or oxygen into the coal seam to initiate the gasification reaction. The other well is used to return synthetic gas ("syngas") to the surface where it is processed further and cleaned for power, gas, and chemical purposes.
The area of the LCEP has excellent existing infrastructure including a rail line, sealed main regional road access, high voltage power, water, airfield and other services associated with the township of Leigh Creek. Coal from the existing Leigh Creek coal mine is currently transported by rail to the coal-fired power station at Port Augusta.
The LCEP is outside the Great Artesian Basin, with drilling intended to occur in locations where water at depth is saline.
The LCEP is conveniently located to a range of markets desirous of commodities produced from syngas. Potential uses of syngas include:

Natural gas (methane), currently in short supply which has driven a tripling of gas prices in recent years. The LCEP is located within 125km of a major gas pipeline (the Moomba-Adelaide Pipeline System).

Ammonium nitrate for fertiliser and explosives, a product where nearly 100% of demand in South Australia is satisfied by imported products.

A number of remote mines require electricity and gas provides a lower cost alternative to diesel fuel power generation.

Recent and pending milestones for the LCEP include:

PEL 650 grant (November 2014).

Application for drilling program approval submitted to the Department of State

Development (February 2015).

Preliminary gas marketing discussions underway.

Geophysics and appraisal drilling (planned for June quarter 2015).

Definition of JORC-compliant resource (intended June quarter 2015).

In Situ Gasification

ISG technology has been in commercial operation in Russia for over 50 years and is now being operated commercially in South Africa (for power generation by ESKOM) and in China for gas and chemicals manufacture.

Doc ID 272409023/v1

Project Funding and risk

A significant amount of work has been undertaken historically for the purpose of defining a resource in the area of the LCEP and more specifically by TriE in securing PEL 650. For example, the Australian Energy Market Operator released the 2014 South Australian Fuel and Technology Report in January 2014, in which it reported that coal tonnage contained within the area covered by PEL 650 included 150mt of measured and indicated coal and
350mt of inferred coal.
Marathon believes the appraisal (not exploration) drilling program planned for 2015 (subject to receipt of relevant drilling approvals) can establish considerable resources to required JORC disclosure standards.
Marathon also believes the current shortage of gas resources on the eastern Australian mainland provides the opportunity for the LCEP to sell gas resources once JORC resources are defined. It is intended that sales of gas resources will provide funding for the full scale development of the LCEP.

Gas markets on the east coast of Australia

The market for gas in eastern Australia is prospective and demand is strong, despite the recent fall in oil prices.
Planned exports of LNG will require additional gas sources for extension of the project life. The eastern Australian market is characterised by a lack of uncontracted supply. This situation has been exacerbated by doubts over supply of coal seam gas in New South Wales.
Such factors all combine to make the LCEP an attractive opportunity to supply gas to domestic markets and industrial consumers.
TriE has undertaken gas marketing planning and has commenced preliminary gas marketing activities which will accelerate, with an intention to focus on three (3) areas:
1. Sales of small quantities of gas to industrial users by way of sale of gas options.
2. Sales of gas volumes from early production aimed at supporting accurate design of the future plant and associated gas pipeline.
3. Possible sales of gas in the ground to support the long term demand required of
the three key LNG facilities being completed at Gladstone in Queensland. This demand stems from gas required for the first 20 years of operation, gas to extend
the life of the plant and possibly gas to expand the size of existing operations.

South Australian support for ISG

South Australia has a formal regulatory environment for ISG projects and investment in the sector is encouraged by the SA Government.
TriE has a policy of supporting gas sales, where commercial, to industrial users of gas in South Australia and in this way supporting ongoing manufacturing and job stability in South Australia.

Doc ID 272409023/v1

Other TriE interests

TriE has a number of pending tenement applications, as follows: Petroleum Exploration Licence Applications

PELA 647 - located west and north west and surrounds PEL 650,

PELA 582 - located northwest of PELA 647,

PELA 643 - located in the southern Cooper Basin,

PELA 644 - located south of PELA 582, and

PELA 649 - located on the Eyre Peninsula, south of Lock.

Exploration Licence Applications

ELA 2014/00232 - located north of the Leigh Creek Coal Field, and

ELA 2014/00238 - located north west of ELA 2014/00232.

All tenement application areas are located in South Australia.


Leigh Creek

Doc ID 272409023/v1

Next steps

Shareholder Approval

Marathon shareholder approval of the transaction is required for a number of purposes under the Corporations Act and ASX Listing Rules. Following review of the notice of meeting and associated explanatory materials by ASIC and the ASX, Marathon will convene an EGM of its shareholders to consider and vote on the transaction as a whole.
It is currently anticipated that the EGM will be held during the last week of April or first week of May 2015. Marathon will keep shareholders informed regarding the likely timing of the EGM.

Regulatory Approval

A number of regulatory approvals are required before the transaction can complete. Relevantly, due to the significant change in the nature and scale of Marathon's activities that will result from completion of the transaction, Marathon will be required to re-comply with the admission requirements of Chapters 1 and 2 of the ASX Listing Rules and will require ASX's confirmation of that re-compliance before the transaction can take effect. Shares in Marathon will be suspended from trading on the ASX from the date of the EGM until ASX confirmation is received. The re-compliance process is currently anticipated to take 4 to 8 weeks.
In addition, as a result of CITIC's status as a Chinese State Owned Enterprise and its current substantial shareholding in Marathon, Marathon will be required to obtain FIRB approval for its proposed acquisition of 100% of the issued capital of TriE.
Finally, Ministerial approval for the dealing in PEL 650 occasioned by the transaction will be required under the Petroleum and Geothermal Energy Act 2000 (SA).


The Board of Marathon has examined many projects throughout Australia and overseas and the LCEP offers an exciting prospect to develop a significant energy company in the future.
We look forward to announcing an EGM date and supplying shareholders with documentation ahead of voting regarding the acquisition of TriE and other related matters.

Media Contacts:

Mr Peter Williams Mr John Field Chairman Managing Director Marathon Resources Limited Field Public Relations (08) 8348 3500 (08) 8234 9555
(0) 418 819 527

Doc ID 272409023/v1

Read the rest of the article at
Data and Statistics for these countries : Australia | China | Russia | South Africa | All
Gold and Silver Prices for these countries : Australia | China | Russia | South Africa | All

Marathon Resources Ltd

Follow and Invest
Add to watch list Add to your portfolio Add or edit a note
Add Alert Add to Watchlists Add to Portfolio Add Note
Projects & res.
Asset profile
Contact Cpy

Marathon Resource is a gold and copper exploration company based in Australia.


Marathon Resource is listed in Australia and in Germany. Its market capitalisation is AU$ 16.6 millions as of today (US$ 12.0 millions, € 10.5 millions).

Its stock quote reached its highest recent level on June 29, 2007 at AU$ 6.98, and its lowest recent point on October 18, 2013 at AU$ 0.01.

Marathon Resource has 92 210 000 shares outstanding.

Your feedback is appreciated, please leave a comment or rate this article.
Rate : Average note :0 (0 vote) View Top rated
Project news of Marathon Resources Ltd
1/31/2012Marathon Resources quarterly
Corporate news of Marathon Resources Ltd
7/31/2015Quarterly Activities and Cashflow Reports
7/29/2015Notice of General Meeting/Proxy re Change of Name
7/14/2015Investor Presentation
7/10/2015Change of Address and Contact Details
7/3/2015Marathon Updates Market on Relisting
7/1/2015Form 604 Substantial Holder Change of Interest
4/27/2015Notice Of Extraordinary General Meeting/Proxy Form
4/22/2015Update ARPTriEnergy Acquisition
4/8/2015Response to Price Query Letter
3/18/2015Form 603 Initial Substantial Holder Notice - Revised
3/18/2015Form 604 Change of Interest of Substantial Holder
3/17/2015Marathon Informs Market of ARP TriEnergy Share Sale
3/3/2015Marathon Signs Share Sale Agreement to Acquire LCEP
2/11/2015Half Year Accounts
1/12/2015Leigh Creek Energy Project Acquisition
12/2/2014Initial Director's Interest Notice
12/1/2014Marathon announces Farm In to Leigh Creek Energy Project
11/25/2014Final Director's Interest Notice
11/20/2014Chairmans Address to Shareholders
11/20/2014AGM Results
11/1/2014Quarterly Activity & Cashflow Statement July - September 201...
10/25/2013contact re Bentley bid
3/21/2011Rights issue Shortfall
10/29/2009ASX release Quarterly Activity and cashflow reports
10/21/2009accepts SA Govt offer of new exploration licence
9/16/2009Marathon survey details uranium anomalies at Mt Gee, SA
7/23/2009Quarterly activities report
7/7/2009Revised letter to Shareholders and details of CEO remunerati...
1/29/2009December quarterly report
11/28/2008ASX announcement - Marathon Resources' 2008 AGM results
1/31/2008Quarterly Activity Statement and Appendix 5B
11/29/2007Grows to 3.54 million ounces of PGM and gold, 4.75 million o...
10/22/2007discovers additional mineralization outside current resource...
7/2/2007Final Assey Results from Recent Drilling Program
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
AU$ 0.180
06/28 10:30 -0.010
Prev close Open
0.185 0.185
Low High
0.180 0.190
Year l/h YTD var.
0.135 -  0.230 12.50%
52 week l/h 52 week var.
0.100 -  0.230 12.50%
Volume 1 month var.
985,010 -5.26%
24hGold TrendPower© : -15
Explores for Copper - Gold - Uranium
Interactive chart Add to compare
Print Compare Export
Last updated on : 12/10/2010
You must be logged in to use the porfolio and watchlists (free)
Top Newsreleases
Annual variation
5 years chart
3 months chart
3 months volume chart
Mining Company News
Plymouth Minerals LTDPLH.AX
Plymouth Minerals Intersects Further High Grade Potash in Drilling at Banio Potash Project - Plannin
AU$ 0.12-8.00%Trend Power :
announces expected non-cash impairment
AU$ 7.58+2.71%Trend Power :
Oceana Gold(Au)OGC.AX
AU$ 2.83-4.07%Trend Power :
Western Areas NL(Au-Ni-Pl)WSA.AX
Advance Notice - Full Year Results Conference Call
AU$ 3.86+0.00%Trend Power :
Canadian Zinc(Ag-Au-Cu)CZN.TO
Reports Financial Results for Q2 and Provides Project Updates
CA$ 0.12+4.55%Trend Power :
Stornoway Diamond(Gems-Au-Ur)SWY.TO
Second Quarter Results
CA$ 0.02+100.00%Trend Power :
McEwen Mining(Cu-Le-Zn)MUX
US$ 0.47-7.33%Trend Power :
Rentech Announces Results for Second Quarter 2017
US$ 0.20-12.28%Trend Power :
Reduced Funding Requirement
GBX 0.53-10.32%Trend Power :
Lupaka Gold Corp.LPK.V
Lupaka Gold Receives First Tranche Under Amended Invicta Financing Agreement
CA$ 0.02+0.00%Trend Power :
Closes Bridge Loan Financing
CA$ 3.00+0.00%Trend Power :
Guyana Goldfields(Cu-Zn-Pa)GUY.TO
Reports Second Quarter 2017 Results and Maintains Production Guidance
CA$ 1.84+0.00%Trend Power :
Lundin Mining(Ag-Au-Cu)LUN.TO
d Share Capital and Voting Rights for Lundin Mining
CA$ 8.71-1.02%Trend Power :
Canarc Res.(Au)CCM.TO
Canarc Reports High Grade Gold in Surface Rock Samples at Fondaway Canyon, Nevada
CA$ 0.30+7.14%Trend Power :
Q A April 2017 Quarterly Report
AU$ 0.25+4.17%Trend Power :
Uranium Res.(Ur)URRE
Commences Lithium Exploration Drilling at the Columbus Basin Project
US$ 6.80-2.86%Trend Power :
Platinum Group Metals(Au-Cu-Gems)PTM.TO
Platinum Group Metals Ltd. Operational and Strategic Process ...
CA$ 1.79-6.28%Trend Power :
Devon Energy(Ngas-Oil)DVN
Announces $340 Million of Non-Core Asset Sales
US$ 59.37+2.73%Trend Power :
Precision Drilling(Oil)PD-UN.TO
Announces 2017Second Quarter Financial Results
CA$ 8.66-0.35%Trend Power :
2nd Quarter Report
AU$ 0.03+0.00%Trend Power :