Stanmore Resources (ASX: SMR) is buying the rest of the Eagle Downs metallurgical coal project in Queensland, from Aquila Coal, after making a deal in February with South32 (LSE: S32; ASX: S32; JSE: S32) for its 50% stake.
It’s also acquiring the neighbouring Eagle Downs South tenement from Aquila, a subsidiary of China Baowu Steel Group.
The Brisbane-based coal miner will pay US$15 million for Aquila’s stake in Eagle Downs and $2 million for the adjacent project. Additional payments of US$20 million and US$10 million are due once the first 100,000 tonnes of coal is extracted from each site, respectively.
It agreed to the same payment terms with South32 for its 50% stake in Eagle Downs.
The total for Eagle Downs also includes a capped royalty stream of up to nearly US$150 million, based on coal price thresholds.
The move boosts Stanmore’s portfolio of metallurgical coal assets, positioning the company to increase its production capacity.
The acquisition is subject to regulatory approvals and it is expected to close in the second half of the year.
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