SINGAPORE (July 18): Geo Energy Resources has signed a conditional sale and purchase agreement to buy a 98.73% stake in an Indonesian company that holds a coal mining concession in South Kalimantan.

The company says in a filing with Singapore Exchange that it will pay International Resources Investment US$90 million (S$121.3 million) for its wholly-owned subsidiary Fortune Coal Resources.

Fortune Coal Resources, the ultimate holding company, has a 98.73% indirect stake in PT Tanah Bumbu Resources (TBR), the concession holder.

The acquisition will add 44.4 million tonnes and doubles Geo Energy’s total mineable resources.

It follows a conditional sale and purchase agreement signed in February to acquire a 79.9% stake in PT Parisma Jaya Abadi and another signed in March to acquire a 99.5% stake in PT Cahaya Lembusuana.

The company is also acquiring the remaining 34% interest that it does not own in PT Sungai Danau Jaya from Borneo International Resources.

Upon completion of these acquisitions, Geo Energy expects to increase its coal reserves to 101.3 million tonnes.

“Our group is looking to expanding production to more than 10 million tonnes of coal in 2017,” CEO Tung Kim Hon says in a press statement. “Our group will be one of the largest coal producers in Indonesia, if we achieve 10 million tonnes of coal production and sales in 2017.”

TBR’s concession is located next to the coal mine owned by PT Sungai Danau Jaya and possesses similar qualities like thick coal seams, low strip ratio and close proximity to jetty, the company says.

Geo Energy, which received approval to extend its minimum trading price requirement review date by six months to Sept 1, is trading 3.6% lower at 14 Singaporean cents.