Under the heads of agreement, Mitsui has the right to earn up to 10% equity in Doyles Creek by spending up to $40 million on the Hunter Valley project.
Following completion of a bankable feasibility study, Mistui will have an option to purchase an additional interest of up to 10% in the project at a pre-determined valuation which will depend on the level of end-user offtake commitments made at the time of exercise of the option.
Mitsui will be also entitled to exclusively introduce the coal from Doyles Creek to customers in Japan.
NuCoal chairman Gordon Galt said: “The company is pleased to have an international partner of the high calibre of MMI [Mitsui] invest in the Doyles Creek Project and we look forward to a successful long-term relationship with MMI as we jointly develop the project”
NuCoal managing director Glen Lewis said: “The execution of this Heads of Agreement with MMI is another substantial milestone for the Doyles Creek Project and clearly highlights the value and quality associated with the company’s assets”
The Doyles Creek tenement contains a 512Mt JORC - compliant Measured, Indicated and Inferred Resource of premium quality semi soft coking and thermal coal.
The coal seams are outlined in the latest Resource Statement dated December 2011 which details high quality, known coal brands such as “Whybrow Coal”, “Whynot Coal” and “Woodlands Hill Coal”.
These coal brands are produced from other collieries in the Hunter Valley and are marketed for sale to overseas steel mills and both the domestic and international power generation industry.
