According to the Canadian Press Thursday, the deal is broken down over two years: 300,000t in 2009 at an average of $US137 per tonne, and 300,000t to 350,000t in 2010 at $138/t.
At an expected total of $41.1 million in the first year and as much as $49.6 million in the second, the deal has the potential to be worth $90.78 million for Hillsborough.
“When taken together with our existing domestic contracts, Hillsborough's average coal price for 2009 will be $105 per tonne, and $113 per tonne for 2010," officials told the news service.
It was not outlined from where the output will originate, but Hillsborough operates the Quinsam underground mine in Campbell River, British Columbia, and is involved in the Peace River Coal Limited Partnership and the Bingay Creek complex in the same province.
Additionally, the company is working to develop another BC operation, the Wapiti mine.
Last month, Hillsborough said it was continuing to explore coal targets at its Crossville operation in Tennessee after drilling tests showed positive results.
“[The outcome] has led to a decision to commence further exploration," the company said at the time.
“Because of the permitted nature of the mine, a decision to recommence mining operations, if subsequently determined to be appropriate, can be executed with rapidity, without a major outlay of capital.”
Last December, the producer said it would mine an extra 40,000t of thermal coal from the Quinsam mine after moving to its 2 South Pit. At that time, Hillsborough CEO David Slater said the mine was aiming for production figures of 850,000t before progressing further to reach 1 million tonnes per annum.
