The deal requires state government approval for the transaction of the permit EPC 1033, which covers 10,080 hectares near the Norwich Park, German Creek and Foxleigh mines.
The area is also near Macarthur Coal and Noble Group’s key Middlemount open cut project.
Under the planned payment structure, Norton will receive the funds over three tranches, with the first tranche of $15 million expected by mid-March.
The second tranche of $5 million is expected in February 2012 while Norton said the third tranche of $10 million will be paid on the second anniversary of the first tranche payment.
There are 57.1 million tonnes of inferred resources in the Sienna project, including pulverised coal injection coal flagged for open cut mining, while the Electra project contains seams prospective for hard coking coal and suitable for underground mining.
The deal will not only free Norton from any more coal exploration but helps its financial situation.
“This is a great outcome for Norton and its shareholders in the sale of a non-core asset,” Norton managing director Andre Labuschagne said.
“Once the transaction completes, the company will have the opportunity to further reduce debt.”
Boardwalk recently entered into a joint venture with Coalworks over the Ferndale project in the Hunter Valley.
This deal allows Boardwalk to earn up to 50% of the project for spending up to $25 million on a bankable feasibility study for open cut mining along with a prefeasibility study on underground mining development.
The private company will also gain a 19.9% stake in Coalworks, pending shareholder approval, with a vote expected in January 2011.
Tinkler locked in decent gains this year by floating Aston Resources a few months ago, which purchased its Maules Creek project in the Gunnedah Basin of New South Wales off Rio Tinto subsidiary Coal & Allied for $480 million in November 2009.
Aston Resources has a market cap exceeding $1.7 billion and Tinkler owns more than a third of the company.
Negotiations for this asset purchase started up in earlier months during the more stressful times caused by the global financial crisis.
Norton shares were steady at 20.5c in morning trade.