Stanmore Resources has successfully completed its Eagle Downs transactions with South32 and Aquila Resources, a subsidiary of China Baowu Steel Group, the world’s largest steelmaker.
The metallurgical coal supplier has acquired the remaining 50 per cent interest in the Eagle Downs metallurgical coal project from South32 and 100 per cent of the Eagle Downs South coking coal tenements from Aquila.
The acquisitions have resulted in Stanmore owning and controlling 100 per cent of the project, which is located in the Bowen Basin region of Queensland.
The company is currently reviewing the project to consider the most capital efficient approach for any development decision.
“Stanmore is excited by the opportunity afforded by completing this acquisition,” Stanmore chief executive officer Marcelo Matos said.
“Stanmore will now seek to optimise the development plan and take a capital efficient approach to any development decision.”
Stanmore paid $US30 million ($45 million) in cash to acquire Eagle Downs and $2 million for Eagle Downs South, as well as approximately $US4 million ($6 million) for completion adjustments.
In February, Stanmore struck an agreement to acquire South32’s 50 per cent stake in Eagle Downs.
The project had been held in a joint venture with China Baowu since South32 acquired half of the project in 2018.
Stanmore offered $US15 million upfront ($22.7 million), with $US20 million ($30.3 million) to be paid from the first 100,000 tonnes of longwall coal being mined. A capped royalty of up to $US100 million ($151 million) will also be paid in the future, which will be linked to average coal price thresholds.
Two months later, the company acquired the remaining 50 per cent interest in Eagle Downs and 100 per cent of the Eagle Downs South coking coal tenements in Queensland from Aquila.
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