East Asia Minerals has entered into a Memorandum of Understanding with Carbon Conservation, a company based in Australia, for the purchase of up to a 50% equity interest. Under the MOU, Canada-based East Asia will pay US$500,000 and issue 2.5 million shares to Carbon Conservation.
Carbon Conservation is a high profile company involved in the internationally recognized UluMasen Ecosystem Carbon Conservation project in the Aceh Province of Indonesia, in the same region as East Asia's Miwah project.
The conservation project was the world's first carbon project to achieve validation under the Climate Community and Biodiversity Alliance Standards for its program for reduced emissions from deforestation and degradation and is being developed in conjunction with the Aceh provincial government and various conservation non-governmental organizations.
It is designed to preserve more than 700,000 hectares of Aceh's forests and as a result create carbon offsets and biodiversity offsets which can be sold in the growing world market for carbon credits. As more and more jurisdictions adopt a 'cap and trade' system to deal with carbon emissions, the creation of carbon credits is becoming a huge industry and can be used to generate economic returns for Aceh's forestry assets.
As well as the payment and shares, East Asia will support the continued maintenance and preservation of the forests, communities and biodiversity in the conservation area with an emphasis on the conservation areas surrounding the Miwah project. It sees this as a way of diverting revenue generated from the Miwah project into Acehnese communities, as well as helping to preserve unique Aceh ecosystems.
Working with Carbon Conservation, East Asia aims to create the greenest mining operation and pioneer Aceh Green Gold in line with the Governor of Aceh's vision for a Green Aceh by offsetting the impact of development of its Miwah project, and other projects in Aceh province, amongst other things.
Carbon Conservation's assets include the sales and marketing rights for the carbon credits created under the UluMasen Ecosystem Carbon Conservation project as well as the purchase and sale agreement with Rio Tinto Aluminum for the carbon credits created under its deforestation project in Queensland, Australia. It also holds the development rights for an avoided deforestation project and biomass energy project in the Gabon Economic Zone.
At present East Asia is also spinning off a number of its other assets in Indonesia and Mongolia in order to concentrate more fully on the flagship Miwah project. It is subsequently forming three new companies - Sangihe Gold, Barisan Gold and East Asia Energy Corporation. The former two will be based on gold opportunities in Indonesia and the latter will encompass the Mongolian uranium prospects.