PERTH (miningweekly.com) – Queensland-based Bowen Coking Coal has entered into a binding agreement to divest of its Comet Ridge project for A$100 000 in cash and a 1.25% royalty stream from the first 2.8-million tonnes of coal produced.
The ASX-listed junior told shareholders that the deal with Springsure Creek Coal included an option under which Springsure could cancel the royalty in exchange for a A$3-million cash payment.
Bowen would also retain the option to purchase all the coal produced from the Comet Ridge project, on an annual basis, for blending or trading purposes.
Springsure holds the Springsure Creek project, which is adjacent to both the Comet Ridge project and rail line, where the grant of a mining licence is imminent.
Bowen told shareholders that Springsure was better placed to develop the Comet Ridge project, allowing Bowen to focus its attention on the Cooroorah project, which recently saw an increase in the Joint Ore Reserves Committee-compliant resource to 154-million tonnes.
“The board sees the transaction as a more efficient way to monetize value from Comet Ridge. Maximising the synergies between Comet Ridge and Springsure Creek is likely to improve the overall viability of the project and subsequent potential for medium-term cash flow to Bowen,” said Bowen MD Gerhard Redelinghuys.
The transaction was subject to shareholder and statutory approvals, and the companies entering into formal documentation.