The mining company expects to receive environmental approval for the Tenas coking coal project in early 2025
Telkwa Coal to divest assets of the Tenas coking coal project to Bathurst Resources. (Credit: nedu503 from Pixabay)
New Zealand-based coal mining company Bathurst Resources has agreed to acquire the assets of the Tenas coking coal project located in British Columbia, Canada from Telkwa Coal, a subsidiary of Allegiance Coal.
According to the terms of the agreement, Bathurst Resources will make an upfront payment of $2.33m at the closing of the transaction and a payment of $1m in 45 days after the closing.
Besides, upon the receipt of all final permits, the company will pay $4m to develop, construct, and operate the Tenas coking coal project.
Telkwa Coal will also receive $3m after completing one year of receiving all final permits.
Furthermore, the agreement involves a capped royalty of up to $3m payable at the rate of $2 per tonne pertaining to coal sales from the Tenas project over the first three years following the start of commercial production.
Located 7km southwest of Telkwa town, the Tenas project comprises the Telkwa Metallurgical Coal Complex.
The assets to be acquired include the coal licences and property interests, vehicles, certain contracts, permits and licences, records, and intellectual property associated with the Canadian coking coal project.
Through the acquisition, Bathurst Resources aims to increase its footprint in a Tier 1 mining jurisdiction and to own a long-life asset that can produce metallurgical coal over 15 years.
The mining company expects to receive the environmental approval for the Tenas coking coal project in early 2025.
Bathurst Resources CEO Richard Tacon said: “In the Tenas Coking Coal Project, we have a commodity in high demand globally, and in which we have proven expertise and existing clients.
”The project is also well-located in a Tier One jurisdiction in which we have invested since 2018, and in which we are very comfortable. Finally, the acquisition has been secured at a price and on terms that are clearly opportunistic for our shareholders.”
The deal is expected to close in the coming months, subject to certain conditions.