PSE Circular for Brokers No. 1529-98

July 6, 1998 PSE CIRCULAR FOR BROKERS NO. 1529-98 CURRENT REPORT PURSUANT TO SECTION 11 OF THE REVISED SECURITIES ACT AND RSA RULE 11(A)-1 (b) (3) THEREUNDER REVISED SEC FORM 11-C, C-1 (Per SEC letter dated June 16, 1998) 1. Date of Report, June 29, 1998 2. SEC Identification Number 91447 3. BIR Tax Identification No. 410-000-191-324-NV 4. Exact Name of Registrant as specified in its charter: SEMIRARA COAL CORPORATION 5. Philippines Province, Country or other jurisdiction of incorporation or organization 6. (SEC use only) Industry Classification Code 7. Address of Principal Offices 7th Floor, Quad Alpha Centrum (Condominium) Building, 125 Pioneer St., Mandaluyong City 8. Registrant's telephone number, Including area code (632) 631-80-01 to 10 9. Former name, former address, and former fiscal year, if change since last Report Not Applicable 10. Securities registered pursuant to Sections 4 and 8 of the RSA. Title of Each Class No. of shares of stock Common shares: 125,810,945,800 common shares Preferred shares 15,000 preferred shares (122,798,555,306 common shares, par value of P.01 per shares exempt under Sec. 6(a)(4) of the Revised Securities Act, 13,418,000,000 common shares, par value of P.01 per share, exempt under Sec. 6(a) (7) of the Revised Securities Act.) 11. Indicated the item numbers reported herein: Item 9 ITEM 9 SEMIRARA COAL CORPORATION (SCC) AND LEIGHTON CONTRACTORS (ASIA) LTD . (LEIGHTON) MEMORANDUM OF AGREEMENT In the Special Board of Director's Meeting held on May 12, 1998, the Board unanimously approved and authorized management of the Corporation to enter into a Memorandum of Agreement wherein Leighton Contractors (ASIA) Ltd. shall undertake initial review and assessment of the Panian coal project of SCC leading to the submissions of a joint venture proposal regarding the development, and operation of the said Panian project. cdlex Leighton is an Australian firm with offices address in the Philippines at 9th Floor, Insular Life Building 6781 Ayala Avenue, Makati City, Metro Manila. It is in construction and contract mining business. It has contract mining operations in Indonesia and undertook the same work with Philex mine in Mindanao. It is the biggest contractor in Australia, SCC earlier had discussed with this firm to undertake the stripping of waste at Unong Mine project of SCC. Finding the Unong work very limited, Leighton believes that it will be more mutually beneficial if SCC goes to Panian on a joint venture with said firm. In pursuit of their idea, a Memorandum of Agreement by and between Leighton and SCC was crafted with the Following highlights: 1. Leighton shall make an initial review and assessment (IRA) of Panian coal project to determine the financial and technical viability of the coal deposit preparatory to the formation and organization of a joint venture corporation should the proposal submitted by Leighton be accepted by SCC. 2. The IRA shall cover activities of Leighton, such as, determination of the financial feasibility, preliminary design, preliminary costing and development proposal with a total budget of $88,610.00. 3. Leighton shall submit its proposal within sixty (60) working days from receipt of all relevant data and information from SCC. 4. SCC has the option to accept the proposal and no liability on the part of SCC shall be incurred in case of rejection. 5. Leighton shall ensure confidentiality of the information, papers, documents and data gathered or provided by SCC and shall use the same exclusively for the purpose of the IRA. 6. Leighton may hire additional Specialist Consultant in the course of the IRA under a budget. Any expenditure over and above the budget shall be for the account of Leighton unless said expenditure is approved by SCC. 7. Leighton shall turn over the work product and/or findings of the IRA free of charge and the same shall be deemed the exclusive property of SCC, and Leighton shall have no right to convey, assign or sell the said work product. cdt 8. All rights and obligations of Leighton under the Agreement shall pertain exclusively to it. Leighton shall have no other right over the Panian coal project except to conduct the IRA. 9. In the event the proposed joint venture agreement prospers, Leighton shall be appointed mine managers. 10. SCC shall pay out of pocket expenses incurred by Leighton as a result of the IRA which shall be limited to the budget within agreed ceiling and any excess expenditure shall be for the account of Leighton unless the same is approved by SCC. 11. During the entire duration of the IRA, SCC agrees to deal, exclusively with Leighton in so far as the proposed Joint Venture Agreement is concerned. SCC, however, shall not be prevented from continuing its mining operations at Panian Coal Deposit during the said period. 12. SCC shall not use Leighton's findings and/or proposal for the purpose of forming another partnership agreement or joint venture agreement with other entity for the development of Panian coal deposit. 13. Should the IRA be terminated or postponed by either party for any cause or be not discharged for reasons outside the control of the parties, SCC shall pay Leighton the reasonable and properly incurred costs up to the date of termination or postponement. 14. Disputes shall be settled in the first instance between the parties; in case of disagreement, through arbitration. Impact of the reported fact or event on the registrant current or future operations, its financial position or results of operations. Upon signing of the Memorandum Agreement the development of Panian will take off in terms of technical viability of the coal deposit preparatory to formation and organization of a joint venture corporation should the proposal submitted by Leighton be accepted by SCC. UPDATE ON STATUS OF AFORESAID MEMORANDUM OF AGREEMENT (MOA) BETWEEN LEIGHTON AND SCC In the Regular Board of Director's Meeting held an June 26, 1998 Mr. Manuel G. Dcmingo, Jr., President and Chief Operating Officer of the company by way of reply to Chairman David M. Consunji reported that the signing and execution of the said MOA will no longer push through because in the recent meeting with Leighton's representative there was substantial change in Leighton's original concept on the formation and organization of the joint venture corporation wherein Leighton will also be the contractor of all the activities and service of the joint venture corporation which SCC at the moment is not prepared to accept. In the light of the foregoing, the company will now try to do the Panian development on its own for at least one (1) year and see if the company can make it a profitable operation. SIGNATURES Pursuant to the requirements of the Revised Securities Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SEMIRARA COAL CORPORATION (SGD.) BENIGNO F. MORALES Corporate Secretary