The acquisition includes the 900-acre Mill Creek tract, which is reported to contain numerous coal seams and is already permitted for production and the construction of a wash plant.
Coal samples at Mill Creek used for quality analysis revealed a dry basis clean coal ash and high ash fusion temperature.
In March, the Calgary-based company inked deals with two unnamed private firms to acquire mineral rights in the area and has closed the deal with a $700,000 payment and at $13 million promissory note at 5% per annum interest.
As part of the acquisition, Cobalt has committed to drill five test holes to additionally evaluate the coal-bearing strata on the leased lands and spend a minimum $500,000 on mine improvements at Mill Creek.
A finder’s fee of $586,000 to an arm’s length party will also be paid following approval from the Toronto Stock Exchange.
