International Coal on the acquisition trail with Queensland coal deal

International Coal (ASX: ICX) has signed term sheets to acquire a significant swathe of EPCA's and an EPC in Queensland, most notably two that surround Anglo American’s advanced open pit thermal coal mines at Callide.

This should provide short term exploration potential for ICX. The location is approximately only 120 kilometres from the port of Gladstone, Queensland.
Subject to due diligence, ICX will acquire EPC 1507 and EPCA’s 2631, 2633 and 2774 all of which have been assessed as being prospective for either coking or thermal coal.

A term sheet has been signed with a private Australian company to acquire 100% of the issued shares of the entity. The acquisition is subject to due diligence and legal assessment which should be concluded within two weeks.

Projects to be acquired

Subject to due diligence, ICX will acquire EPC 1507 and EPCA’s 2631, 2633 and 2774 all of which have been assessed as being prospective for either coking or thermal coal.

EPC 1507 and EPCA 2633 look particularly interesting as they provide ICX with a strategic interest in a well defined coal production location, surrounding Anglo American’s Callide open pit thermal coal mines.  Although it should be noted that EPC 2633 is subject to a competing application.

EPCA2631 is within the well known coking coal district of Bundaberg and adjacent to the company’s already wholly owned project EPC2194 and 2196.

EPCA 2774 is in an emerging and developing location east of Mt Isa. Significant exploration and infrastructure planning is occurring in this region and the board believes this project location and size offers a very sound addition to the company’s suite of prospective projects.

Acquisition terms

As consideration for the acquisition of this private entity, ICX may pay to the existing shareholders of the private entity the following:

- 2,000,000 ordinary shares in ICX,
- A cash payment of $250,000 and
- 3,000,000 options valid for 5 years from completion of any transaction with a strike price of 35 cents.

The transaction may be subject to approval of shareholder at a general meeting of shareholders.  This will be determined following completion of due diligence.

Strategy

Just this week, ICX announced it was expanding its footprint in the Eromanga Basin with applications for 11 Exploration Permits for Coal in the Eromanga Basin area and the surrounding region in SW Queensland.

Today's announcement of further acquisitions provide ICX shareholders with an ever greater footprint and potential to develop numerous coking coal and thermal coal projects throughout Queensland.

It does provide a regional diversification for ICX as well as further its strategy of selective targeting of assets close to existing large scale operating mines.  Today's potential acquisitions certainly do that.

Clearly, ICX has moved aggressively to tie-up prospective EPC's and EPA's in coal rich Queensland.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/23201/international-coal-on-the-acquisition-trail-with-queensland-coal-deal-23201.html