Announcing results of a strategic review undertaken by Cougar, new managing director Rob Neill said its coal assets shouldn’t necessarily be sold off, despite the board moving to do so in August.

He also said the move was partly initiated due to “current coal markets”

“The coal sale asset divestment process that we announced on 17 August continues with strong interest from various parties, however, simply conducting a divestment of these assets as they stand today may not necessarily maximise their value given the current coal markets,” Neill said.

Cougar put its coal assets up for sale during August, with Hong Kong-based Emerald Resources put in charge of the sale.

It will now move to create a wholly owned separate company incorporating its assets in the Surat and Bowen basins, while looking for other coal opportunities in Asia including Indonesia, China and Mongolia, although in its 2012 annual report it admitted that progress in China was slow.

The new business unit will be known as Kandoman Resources but there was no mention of this in the company’s annual report released to the market yesterday.

Kandoman will take control of the Mackenzie and Wandoan assets.

The Mackenzie asset in the Bowen Basin suits underground longwall production, according to Cougar and has a target resource estimate of 120-170 million tonnes.

Meanwhile, the Wandoan asset has a JORC-compliant resource of 360Mt within the Walloon coal measures.

Neill said the new business unit would complement its existing UCG business push into Asia.

Yesterday it said it had signed a memorandum of understanding with Canada-owned Hulaan Coal Corporation to look at its Mongolian assets for UCG potential.

The ASX-listed company will be granted due diligence over Hulaan’s assets, which Cougar said included a preliminary 500MMt of thermal coal.