The agreement is in addition to the program conducted early in the 2014 calendar year which used funding from the first Belview exploration support agreement.

The new deal provides Stanmore Coal with $1.5 million to do more drilling and associated analysis within the northern region of Belview.

Taiheiyo’s combined rights include an entitlement to buy up to 200,000 tonnes per annum over the first five years of production.

Within this annual arrangement, the first 225,000t of coal bought will be priced at a $2/t discount to the Japanese settlement price which prevails at that time. Any discounted tonnage amount that is not taken up in the first three years of production is foregone.

Drilling will start soon, with laboratory analysis expected to be completed in the second quarter of 2015.

Taiheiyo Kouhatsu Inc Fuel Department GM Satoshi Takase said: “We are very pleased to continue our strong relationship with Stanmore Coal and particularly the Belview project.

“Our funding objective is to assist Stanmore as the project heads towards the development phase. We value our working relationship with the board and management team and wish them success in the upcoming exploration program.”

Stanmore Coal managing director Nick Jorss said the company was highly appreciative of the support provided by Taiheiyo and JOGMEC.

“It further strengthens our relationship with our valued Japanese partners, being the third such funding arrangement for Belview and The Range since 2012, in addition to the $4.5 million JOGMEC joint exploration agreement currently underway at the Clifford project,” he said.

The funds will be used to complete an important phase of exploration which will drive feasibility studies and further evaluation of the coking coal asset. The project features strong coking coal quality characteristics and is on existing rail infrastructure, Jorss said.