PERTH (miningweekly.com) – ASX-listed junior Balamara Resources on Tuesday announced a A$13-million all-scrip deal to consolidate the ownership of the Mariola thermal coal project, in Poland.

Under the terms of the transaction, Balamara would issue 200-million of its own shares, or similar, to acquire the remaining 85% of Polish company Carbon Investment, which owns the rights to the Mariolo project.

The Australian junior acquired an initial 15% cornerstone investment in Carbon Investment in July this year in a transaction worth about A$1.6-million.

Based on the current 15-day volume weighted average price for Balamara shares, the transaction was valued at A$13-million.

Balamara told shareholders on Tuesday that the consolidation of the Mariola project would add further weight to the company’s extensive Polish coal portfolio, while it would also establish a strong foundation for its staged development approach by providing an early production and cash flow opportunity.

The Mariola project would likely become Balamara’s first producing mine, owing to its advanced status, shallow coal seams and location immediately adjacent to a thermal coal power station.

The project was estimated to host an indicated resource of 43.6-million tonnes and an inferred resource of 33.5-million tonnes.

Balamara MD Mike Ralston said the completion of the merger with Carbon Investment by the end of November would mark another major milestone for the company on its journey to become the next substantial Polish coal producer.

“Mariola provides Balamara with a substantial asset that will potentially deliver considerable returns through early production

“With Poland being a low operating cost environment, as well as a low sovereign risk location, we are well placed to deliver considerable value into Balamara moving forward.”

The indicated resource would form the basis of a prefeasibility study for the Mariola project, with production targeted at the end of 2016.