PERTH (miningweekly.com) – Coal hopeful Attila Resources on Monday announced that it would sell its 70% interest in the Kodiak coking coal project, in the US, for $55.3-million to US-based Magni Resources.

Attila revealed to shareholders that it had received a confidential, unsolicited expression of interest from Magni in July this year, indicating the company’s interest to purchase the Kodiak project.

Magni conducted a due diligence on the project, before entering into an agreement with Attila.

Under the binding membership interest purchase agreement, Attila would sell its interest in subsidiary Attila Resources US Holding for $55.3-million in cash. On the completion of the transaction, Magni would also replace the bonds lodged by Attila with Kodiak Mining Company, returning an additional A$810 000 to the ASX-listed company.

Attila told shareholders that the agreement represented a significant premium to the company’s current market capitalisation of A$24-million, and enterprise value of A$33.8-million.

“We are pleased to have reached agreement on a transaction that we believe will generate strong value for Attila shareholders in light of the current market conditions. The price offered to Attila represents a significant premium to the value of our interest in the Kodiak project implied by our share price, and will leave the company with a strong cash position, significantly greater than our current market capitalisation, and debt free,” said Attila executive director Evan Cranston.

Magni chairperson Kevin Loughrey said that the acquisition of the Kodiak mine was a significant first step in the company’s strategy and provided Magni with a foothold in the Cahaba metallurgical coal basin.

“Magni Resources is committed to seeking financing for the transaction and the development of the Kodiak mine; this financing being a condition precedent to completion. We are confident that this financing can be obtained in a timely manner,” he added.

Attila was hoping to gain shareholder approval for the transaction by the first quarter of next year, while financing for the transaction would likely be secured in the next 60 days.

The Kodiak project covers some 11 700 acres and incorporates the Gurnee and Seymore project areas. The Gurnee property is estimated to host an inferred resource of some 81-million tonnes.