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Bowen Coking Coal signs Term Sheet with Sumitomo for Hillalong Farm In

Coal News - Published on Thu, 10 Oct 2019

Image Source: i-q.net.au
Bowen Coking Coal Ltd announced that its wholly owned subsidiary Coking Coal One Pty Ltd has executed a non-binding Term Sheet with SCAP Exploration Pty Ltd, a wholly owned subsidiary of Sumitomo Corporation, whereby Sumitomo has agreed to farm-in terms relating to BCB's Hillalong Coking Coal Project. The parties have agreed to negotiate in good faith and to use all reasonable endeavours to agree the terms of a formal legally binding farm in agreement consistent with the following key terms and conditions:

Sumitomo to fund AUD 2.5 million of pre-defined exploration expenditure, being the entire phase 1 exploration program for both Hillalong North and Hillalong South (two priority open pit targets identified by the Company) within 12 months of entry of the Farm-In Agreement (or such later date agreed), to earn an initial 10% interest in Hillalong ("Phase 1 Interest")

Sumitomo has the right to then earn an additional 10% interest, by providing a further AUD 5 million funding for to-be-agreed exploration and study activities at Hillalong ("Phase 2 Interest")within 24 months of the Phase 2 work program being approved (or such later date agreed);

BCB and Sumitomo will form an unincorporated Joint Venture managed initially by BCB, post Sumitomo earning the Phase 1 Interest;

BCB has granted Sumitomo an exclusivity period of 60 days in which the parties must agree formal terms of the Farm-In Agreement.

Company's Managing Director, Mr Gerhard Redelinghuys said "We are delighted to have attracted a partner of the calibre of Sumitomo Corporation, who brings a wealth of experience and significant financial backing in the global coal mining, trading and related steel industries. Sumitomo has a long history in the Australian coking coal industry and we look forward to building the relationship with them to the mutual benefit of both our Companies"
The Hillalong Coking Coal Project (EPC 1824 & EPC2141) is located in the northern Bowen Basin approximately 105 km west-southwest of Mackay. The tenement comprises 31 sub-blocks (approximately 99km2) located to the west of the Mount Hillalong Anticline and is approximately 16 km northwest of the Hail Creek mine, owned by Glencore, Marubeni and Sumitomo. The tenement contains the Moranbah, Rangal and Fort Cooper Coal Measures commencing at surface. Two economic coal seams, Elphinstone and Hynds (Leichardt and Vermont equivalents) within the Rangal Coal Measures are currently being mined at proximate mines. Historical exploration by Rio Tinto proved the existence of these seams within the boundaries of the tenement with inidicative coking coal qualities aligned with neighbouring mines. Xstract Consulting estimated an Exploration Target* in accordance with the JORC Code (2012) of between 61Mt and 409Mt from the Rangal Coal Measures and Moranbah Coal Measures for both open pit and underground targets as per Table 1 below.

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Posted By : Rabi Wangkhem on Thu, 10 Oct 2019
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