Coziron Resources (CZR), a Western Australian – based company, looks set to diversify its base metal exploration activities, after signing an agreement to acquire a 60,000 litres per day ethanol plant in Malaysia.
The news sent the shares up 5 cents or 31% to a high of 21 cents during intraday trading. They then eased down to close at 17 cents, a 6% increase on previous day's close.
"The directors believe that the acquisition of this renewable fuel plant will contribute a significant revenue stream to Coziron by the first half of the 2009 financial year and will add significant value to all shareholders," the company said.
Under the terms of agreement, Coziron will pay A$45 million for all the issued capital of Empee, via the issue of 225 million Coziron shares, at a deemed price of 20 cents each, to the vendors or their nominees.
Empee is the registered holder and beneficial owner of all the issued capital of Empee Sugar & Allied Industries which is the owner of 60,000 litres per day ethanol plant to be constructed in Malaysia.
The land on which the plant will be built has been secured and a company has been commissioned to design, engineer and manufacture the plant.
It is expected to be shipped to the site in Malaysia in March 2008.
Coziron says it will continue its geological assessment of its tenements in Indonesia.
At the end of the September quarter, the company had a cash balance of $982,000 after reporting a quarterly operating cash outflow of $573,000.
