Sienna and Electra Coal Projects

Coal Sale

Norton announced on 17 December 2010 that it had entered into a binding Sale and Purchase Agreement (“SPA”) with Boardwalk Sienna Pty Ltd, a subsidiary of Boardwalk Resources Pty Ltd (“Boardwalk”), an investment vehicle of coal magnate Nathan Tinkler, for the sale of EPC 1033, including Norton’s Sienna and Electra coal projects, and associated assets for a total consideration of $30m.

Payments to Norton will be structured as $500,000 on signing, tranche 1 of $14,500,000 payable the later of 10 business days after the satisfaction of conditions precedent or 14th March 2011, tranche 2 of $5,000,000 payable on 22nd February 2012 and tranche 3 of $10,000,000 payable on the 2nd Anniversary of tranche 1.

The Agreement is conditional on receipt of indicative Ministerial approval to the sale of EPC1033, and the parties will be applying for this immediately. Norton and Boardwalk have also agreed that in the event that Boardwalk lodges an Application for Mining Lease over any part of the EPC 1033 tenement, that all outstanding monies (be that Tranche 2 and / or Tranche 3) will become immediately due and payable. Details are set out in the ASX release December 17, 2010 and can be accessed via the following link.

Sienna and Electra Coal Project Sale
      December 17, 2010

Sienna and Electra Coal Project Information

Norton secured title to the Middlemount coal tenement (EPC 1033) in March 2006.

The southern area, which is prospective for an open cut PCI mine development, is called the Sienna Project; and the northern area, prospective for underground coking coal, is called the Electra Project.  

In June 2008, a drilling program over the Sienna area (Phase I) was completed. This was the basis for an independent scoping study which indicated the potential for a large open cut PCI mine. Details were then advised to the market and can be accessed via the following link.

  Drilling indicates potential for large open cut PCI mine
       July 2, 2008

A Phase 2 drilling program covering the Sienna area was completed in April resulting in a JORC-compliant coal Mineral Resource of 57 million tonnes being defined. Details and plans for further work are set out in the ASX release 27 April 2009 and can be accessed via the following link.

Sienna Coal initial resource defined: 57 million tonnes
      April 27, 2009

The Company remains active in considering how to best position these assets, and has engaged a corporate adviser to assist with the strategic positioning of these projects.

Electra has the potential for high quality coking coal at depths below 300 metres similar to that mined at the nearby Norwich Park Mine. Electra has had limited drilling. The status of Electra and how best to move it forward will be considered in conjunction with the Sienna project.

In November 2009 the Electra area had one hole drilled to 702 metres.

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