International Coal expands coal footprint in Queensland, completes due diligence

International Coal (ASX: ICX) has completed due diligence on the acquisition of 100% of Great White Nominees, giving International Coal access to projects that neighbour existing large scale operating mines.
Independent expert analysis indicates that the assets are prospective for coking and thermal coal.

International Coal has engaged an independent consultant to develop an exploration program for the coal exploration permit.

Following the exploration program, expected to be conducted over the coming months, International Coal will consider undertaking a drill program to assess the volume and quality of thermal coal deposits at the site.

Significantly, the coal exploration permit and one of the permit applications surround Anglo American's advanced open pit thermal coal mine in Callide.

Of the coal exploration permit applications, one is located in the well known coking coal district of Bundaberg, adjacent to International Coal’s existing Bundaberg project which contains two target exploration coal-bearing units.

Another of the applications is in an emerging region east of Mt Isa, where significant exploration and infrastructure planning is underway.

Terms of agreement

The consideration for the acquisition of Great White Nominees comprises:

- 2 million International Coal shares;
- $250,000 cash; and
- 3 million International Coal options valid for five years from January 12, 2012, with a  strike price of $0.35.

Strategy

International Coal is focused on developing a number of prospective coking coal and thermal coal projects throughout Queensland.

This transaction provides further regional diversification of the company’s assets close to existing large scale operating mines.

In December 2011, International Coal expanded 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.

These acquisitions show that International Coal is aggressively pursuing prospective EPCs and EPCAs in coal rich Queensland.

Analysis

As one of the best performing IPO's on the ASX in 2011, it has been a quantifiably strong start to the public lists for ICX.  The latest addition to coal assets in Queensland surrounding Anglo American's advanced open pit mine at Callide, where independent analysis indicates EPC and EPCA’s are prospective for coking and thermal coal raises the valuation bar for ICX, yet again.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/24105/international-coal-expands-coal-footprint-in-queensland-completes-due-diligence-24105.html