09:51 SINO PROSPER<00766> - Announcement (2) estimated bitumen content of asbuton is around 45 million metric tons) up to the depth of minus 40 meter within the mine. Mr. Sayono is the patent holder of the bitumen extraction process (Patent No ID 0004877). Mr. Sayono and Mr. Hariono Moeliawan undertake with SP Resources to obtain, within 90 days from the injection of capital by SP Resources, the grant of the mining rights of the Buton Bitumen Mine by the relevant central government authority of Indonesia to the Joint Venture Company for the tenure of 20 years and an area of not less than 50,000 hectares, with a renewal right for another 20 years. The application of the mining rights of the Buton Bitumen Mine will be made by the Joint Venture Company and Mr. Sayono and Mr. Hariono Moeliawan will procure the Joint Venture Company to obtain the grant of mining rights of the Buton Bitumen Mine from the relevant central government authority of Indonesia. SP Resources shall have the right to terminate the Joint Venture Agreement if such grant is not obtained within the above 90 days or is obtained subject to the conditions which are not acceptable to SP Resources. Mr. Sayono and Mr. Hariono Moeliawan further undertake to obtain, within 6 months from the date of granting of the mining rights as mentioned above, all necessary approvals, permits and licences for the Joint Venture Company to develop, build and operate a specialised terminal in Buton Island, Indonesia to allow ocean going vessel to berth at such terminal and to export products produced by the Joint Venture Company. SP Resources shall have the right to terminate the Joint Venture Agreement if such necessary approvals, permits and licences are not obtained within the above 6-month period or are obtained subject to the conditions which are not acceptable to SP Resources. On 25 April 2005, the Ministry of BAPPENAS (National Development Planning Agency *) of Indonesia issued a letter supporting the incorporation of the Joint Venture Company for the investment of the bitumen extraction project at Buton Island, Indonesia, all in accordance with the applicable laws and regulation of Indonesia. According to the Joint Venture Agreement, CMEC, which is independent of and not connected with the Company, the directors, chief executives and substantial shareholders of the Company and its subsidiaries and their respective associates (as defined in the Listing Rules), will conduct the exploration and mining of the Buton Bitumen Mine. Upon the commission of the Buton Bitumen Mine, CMEC will engage including but not limited to the engineering, production and management of the mine and will retain as the engineering procurement construction contractor. CMEC will provide financing arrangement, including seller's credit, for the phase 1 of the bitumen extraction project, which a minimum of 200,000 metric tons of marine fuel oil and a minimum 250,000 metric tons of superpave asphalt modifier and epure modifier will be produced. The future results of the Joint Venture Company will be consolidated into the Group's accounts. Capital contribution Pursuant to the Joint Venture Agreement, the initial investment and authorised share capital of the Joint Venture Company will amount to US$5,000,000 (equivalent to approximately HK$39,000,000) and the initial paid up capital of the Joint Venture Company will amount to US$1,250,000 (equivalent to approximately HK$9,750,000). The initial paid up capital of the Joint Venture Company will be contributed as to US$812,500 (equivalent to approximately HK$6,337,500) by SP Resources from the internal resources of the Group. Mr. Sayono undertakes to provide all the relevant information and documents of the Patent Technology to CMEC for review and examination. After CMEC confirms that the Patent Technology can be effectively applied in the exploration and mining of the Buton Bitumen Mine in a cost efficient manner, SP Resources, Mr. Sayono and Mr. Hariono Moeliawan agree that Mr. Sayono shall transfer the Patent Technology to the Joint Venture Company as payment in kind in exchange for 35% of the issued share capital of the Joint Venture Company, 25% to Mr. Sayono and 10% to Mr. Hariono Moeliawan. The initial authorised share capital and the initial paid up capital of the Joint Venture Company were determined after arm's length negotiation between SP Resources, Mr. Sayono and Mr. Hariono Moeliawan. Upon the establishment, the Joint Venture Company will be owned as to 65% by the Group, as to 25% by Mr. Sayono and as to 10% by Mr. Hariono Moeliawan. Pursuant to the Joint Venture Agreement, all capital requirements of the Joint Venture Company exceeding the initial paid up capital shall be wholly provided for by SP Resources as shareholder's loan to the Joint Venture Company. It is intended that the initial shareholder's loan to be provided by SP Resources with maximum amount of US$3,750,000 (equivalent to approximately HK$29,250,000) will be injected to the Joint Venture Company by stages after the completion of the set up of