PERTH (miningweekly.com) – Singapore-listed Linc Energy has agreed to sell its conventional coal assets, in Queensland, to United Mining Group, in a deal valued at A$5-million.

The assets include Linc’s agreement to acquire the Blair Athol coal mine from the current joint venture (JV) owners; the Teresa development project and its Gladstone port capacity; the Pentland and Dalby development projects and Linc’s Queensland greenfield exploration tenure.

Linc said on Monday that these assets would be bundled into a subsidiary, New Emerald Coal, which United Mining Group would acquire. United Mining Group was expected to complete the acquisition of the Blair Athol mine from the JV in the coming weeks, and would restart operations on site.

Meanwhile, Linc pointed out that the existing revenue sharing agreement with New Emerald Coal would remain in place following the completion of the transaction, and would see Linc receive an indexed $1/t of product sold from the Teresa and Pentland projects, as well as 50c/t from product sold at the Blair Athol mine.

These projects had a combined Joint Ore Reserves Committee-compliant resource of 614-million tonnes, and had the potential to add about $590-million in future revenue to the Linc bottom line.

Linc MD and CEO Craig Ricato stated that United Mining Group would also be responsible for all future development costs and liabilities, allowing Linc to avoid the need to direct a significant amount of future capital into its coal business, and saving the company more than A$20-million a year in administration and existing liability costs.

“The sale of our conventional coal exploration, development and mining business in Queensland to the United Mining Group continues to deliver on our strategy of refocusing Linc Energy on our core business of conventional and unconventional oil and gas,” Ricato said.

He added that the revenue sharing agreement would ensure that the company would benefit from the future development of the assets, when the coal market improved.

The disposal of the Queensland assets was subject to a number of conditions, including regulatory and shareholder approval.