Tellus Signs Equipment Supply and Finance MOU

• Tellus signs MOU with CCTEG for mining equipment finance
• Finance Package is valued at AUD$120 million
• CCTEG is one of China’s largest state-owned enterprises, generating more than US$7B revenue and specialising in the manufacture and sale of specialised mining equipment

Tellus Holdings Ltd (“Tellus”) is pleased to announce it has signed a Memorandum of Understanding (MOU) with China Coal Technology and Engineering Group Corp (CCTEG) for the supply and finance of mining equipment to develop Tellus’ Chandler and Sandy Ridge Projects.

CCTEG is one of China’s largest state-owned enterprises (SOEs), generating more than US$7B revenue from the manufacture and sale of specialised mining equipment and operating mines. CCTEG has been involved in the development and operation of more than 70% of China’s large underground coal mines.

“We look forward to working with CCTEG as the projects progress through bankable feasibility studies to finalise equipment requirements,” he said.

The Parties will now work together to finalise detailed documentation, scope of equipment and financing terms. Draft financing terms are attractive to Tellus and include:

• staged draw-down linked to provision of equipment
• an interest rate to be agreed, calculated from the date that the equipment is delivered
• a one-year repayment free period following provision of equipment
• full repayment of the loan within five years

The financing package represents a material tranche of the total capital requirement for Tellus’ Sandy Ridge and Chandler projects. The Company is progressing arrangements for the remaining funding requirement and will provide further updates to the market in due course.

“Tellus executives are also taking part in a Northern Territory Government sponsored trade delegation to China, led by the NT Minister for Business Peter Styles. These trips are successful at building relations between Australia and China and facilitating trade and investment opportunities. Tellus appreciates the Government invitations and facilitation with key players through these initiatives,” he said.

The initial introduction to CCTEG was through GRID Investments from Singapore and facilitated by Equipment Resource Group (ERG) of New South Wales, Australia.

Tellus Holdings Ltd is an infrastructure project development company with a proposed dual revenue infrastructure business model. This involves mining the commodities salt and kaolin and backfilling the voids left from mining with equipment, archives or long term temporary storage of waste. Tellus plans to store like-with-like materials, so as to create opportunities for the future long term, temporary storage, treatment and recovery of valuable materials or permanent isolation of waste. Tellus’ business model mirrors world’s best practice solutions operating in the UK, Europe, USA and Canada. Tellus is developing the Chandler project in the Northern Territory (NT) and the Sandy Ridge project in Western Australia. Tellus’ flagship ‘Chandler Project’ has been awarded Major Project Status by the Northern Territory Government.

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