Following what many have perceived to be detrimental legal altercations through the past year, the London-listed mining company has since granted new share options to many of its employees
Churchill Mining has extended 5.4 million share options to its directors, executive management and consultants. The corporation, whose primary activity is in coal mining, has stated for the new options to be exercisable at the price of 28p per share, expiring five years from date of issue.
The new options, which vest after 12 months of service as of March 21 2013, are hoped to settle any qualms of the company’s present state in relation to recent legal issues. Chairman David Quinlivan has been granted one million options whereas fellow directors John Nagulendran, Gregory Radke and Nicholas Smith were each granted 800,000.
The options entail the tax deferral properties of qualified stock options. If held for a year from the date of exercise and two from them being granted, then any profit gained at sale is taxed as long-term capital gain – beneficial in that it is taxed at a lower rate than that of standard income. Though harbouring a greater tax treatment to that of non-statutory options, the options simultaneously demand for the holder to take on more risk in their holding of stock for a longer required period.
The company has risen to fruition since its listing on the Alternative Investment Market of the LSE in April of 2005. The company grew exponentially after its discovery of a world-class thermal coal deposit in the East Kutai Regency of Kalimantan; this being preceded by an exhaustive and targeted exploration program. However, Churchill Mining has more recently been plagued by legal disputes in the wake of the Indonesian government granting a rival firm the rights to the mining of a previously assumed operation. Having sought $2bn in compensation last year, the Supreme Court of Indonesia have since rejected the company’s appeal, ReforMiner Institute vice director Komajdi Notonegoro saying in relation to the case that: “Due to the poor implementation of regional autonomy, we have tens of thousands of permits being issued by regional administrations, but only a few of them are registered within the central government’s database,” as such resulting in a great deal of both confusion and corruption.