Bowen Coking Coal has agreed to acquire the Bluff PCI coal mine in Queensland, Australia, from mining contractor MACA.
According to the binding agreement, MACA will receive $3.7m (A$5m) in either cash or Bowen shares plus quarterly price-linked royalty payments for coal sales from the mine.
Earlier this year, the receivers and managers of MACA awarded preferred bidder status to Bowen Coking Coal for the sale of the Bluff mine.
This provided BCB with exclusivity to undertake detailed due diligence and advance towards a binding transaction.
A put-and-call option agreement was signed by Bowen and MACA, allowing the latter to complete certain administrative tasks pertaining to the lease sale.
The Bluff mine assets include a granted mining lease (ML80194), which is approved to mine up to 1.8Mtpa of high-quality ultra-low volatile PCI coal.
The mine, which started coal production in the first quarter of 2019, was put on care and maintenance in December 2020 due to low coal prices.
It holds all the permits required to restart production while the restart capital is estimated at $3.7m (A$5m) to $5.2m (A$7m).
According to estimates, Bluff has 13.5Mt of total indicated and inferred resources.
Bowen executive chairperson Nick Jorss said: “Bluff is a rare opportunity to acquire a near-production asset, which can be recommissioned without significant capital expenditure.
“The acquisition of the Bluff PCI mine accelerates our goal of becoming the Bowen basin’s next independent producer of high-quality metallurgical coal to supply the steel industry worldwide.”
The transaction is planned to be completed by the end of the 2021 calendar year.