Anyang Longyu provides a $18.1 million USD loan to Endocoal for the Construction of the Train Load Facility of the Meteor Downs South Coal Mine Project

Project narrative

In 2020, Anyang Longyu (HK) Development Co., Limited (AL), a subsidiary of U&D Coal Limited's ultimate parent entity Chinese state-owned Henan Energy and Chemical Group (HNEC), entered into a $18.1 million USD loan agreement with Endocoal Limited — a wholly-owned subsidiary of U&D Mining Industry (Australia) Pty Ltd, itself a wholly-owned subsidiary of Australia-based coal explorer and producer and joint venture U&D Coal Limited, which is jointly owned by Australia Kunqian International Energy Co., Pty Ltd, a wholly owned subsidiary of Chinese state-owned China Yima Coal Group (51%), China Kunlun International Holding Limited (24%), Golden Globe Energy Limited (23%), and its several individual investors — to support Endocoal's share of the construction costs of the Train Load Facility (TLO) as part of the Meteor Downs South Coal Mine Project. The Meteor Downs South (MDS) Mine is a open cut coal mining operation located in the lower Bowen Basin region 45 kilometers south of the township of Springsure. At the end of 2019, Sojitz MDS Mining Pty Ltd (SCM) awarded a contract to ALLROADs to contract to conduct site civil works for new roads and the train loading facility. The TLO was intended to allow the SCM-Endocoal joint venture to increase the production of the mine from 500,000 t.p.a. to 1.6 million t.p.a. However, because of failures of U&D Coal to meet cash call obligations for March 2020, April 2020, and May 2020, SCM took control of Endocoal under a Deed of Cross Charge, taking all the rights, powers, and authorities as under the deed, including a buyout option or marketing to sell Endocoal's share of the JV. U&D Coal paid the March 2020 cash call and planned to pay the remaining cash calls and was negotiating return of control of Endocoal to U&D Mining Industry. The TLO was completed before July 31, 2020.