KUALA LUMPUR (Dec 19): Handal Energy Bhd's 49%-owned associate company Handal Borneo Resources Sdn Bhd has entered into an agreement with Tanjung Aru Eco Development Sdn Bhd (TAED), a unit of Chief Minister of Sabah Inc, for the operation, management, extraction and sale of marine sea sand for a 15-year period in three concession areas.

In a Bursa Malaysia filing on Monday (Dec 19), the group said the concession areas are the Sunken Barrier Shoal, Hayter Shoal and Bunbury Shoal, all of which are about 55km offshore from Kota Kinabalu, Sabah.

Handal did not state the value of the concession.

"The marine sea sand available within the concession areas fulfils the requirements for two purposes, namely bulk filling for reclamation projects and recreational beaches. A site investigation conducted by a professional surveyor reports total sand reserve from the concession area to be approximately 153 million cubic metres. However, not all the sand reserve may be mined due to environmental, technical, and economic reasons," it said.

Handal said that in conjunction with the concession, it had entered into a shareholders' agreement with the other shareholders of Handal Borneo Resources to regulate their relationship.

The concession is expected to contribute positively to the group's earnings for the financial year ending Dec 31, 2023 onwards, until it expires.

According to Handal, the concession agreement may be terminated if conditions precedent to the agreement are not met or waived.

"Handal Borneo Resources will take all reasonable measures to fulfil all the conditions precedent as set out in the agreement," it said.

Handal closed up two sen or 14.29% to 16 sen, for a market capitalisation of RM38.51 million.