Corsa will raise $US40 million in funding from the agreement as well as acquiring Quintana subsidiary Kopper Glo, a Tennessee-based coal producer.

Quintana gains a controlling stake of 56% in Corsa and a redeemable 25% interest in its subsidiary, Wilson Creek.

Corsa Coal will privately place 60.2 million common shares to secure an initial $10 million funding and has an option to place a further 176.5 million common shares to raise another $30 million.

The company said in a statement that the proceeds from the first tranche would be used for working capital, with the second to repay the $25m debt owed to Sprott Lending.

Corsa Coal president and CEO Don Charter said the funding and acquisition was a major advancement.

“We are delighted with the investment by Quintana and their belief in our assets and operating team. This is a major step forward for Corsa in its objective of establishing itself as a significant new US based supplier of metallurgical coal into the world market,” Charter said.

With the new capital provided, reduction in debt, immediate cash flow and quality coal together with the involvement and support of Quintana with its experience and expertise in coal, Corsa is well positioned to continue with its sales and production growth and the development of its mining projects.”

Quintana managing director George Dethlefsen echoed Cherter’s enthusiasm for the agreement.

“We have a very positive outlook on the low-volatile metallurgical coal space and Corsa’s high-quality coal reserves and mine development strategy fit well within that thesis,” he said.

“Corsa and Kopper Glo together form a well-capitalized platform with exceptional management and operational teams. We believe that this transaction positions Corsa to execute on its long-term growth plan to be a large producer of some of the highest-quality coal in the world.”

The transaction is subject to the approval of the Toronto Stock Exchange and Corsa’s shareholders.