Investors welcomed today's news with Blackham's share price gaining 9c (10%) to 99c in afternoon trade, bucking the lacklustre trend on the broader Australian market.
The two companies have signed a binding joint venture agreement over the 668 million tonne Scaddan lignite project, with Blackham and Premier Coal to hold 70% and 30% interests respectively in the project.
Both companies will be required to contribute proportionately to all costs incurred in furthering the project's downstream processing potential - including coal to liquids.
Premier Coal has also agreed to provide Blackham with all exploration, commercial and economic data and technological information regarding the coal to liquids potential of the project.
Blackham will pay $A2.5 million for the data in cash or shares and a royalty of $0.25 per tonne on Blackham's interest in the annual coal tonnes extracted from the deposit. The royalty will be payable up to a capped volume of 50Mt, after which no further royalty will apply.
The agreement has ended the jostling over competing claims to the tenements which began in March last year when Blackham announced it had applied for exploration licences in the Scaddan region on the basis that Premier Coal, which previously held the tenements, failed to lodge an extension of term application for exploration licences prior to the expiry date.
Premier Coal previously reported a JORC-complaint lignite resource at Scaddan of 668Mt with 487Mt in the measured category and 181Mt in the inferred category.
