London-based Cambrian Mining said would sell its holdings in King-Coal and Maple Coal in exchange for new shares in Coal International.

In exchange for its 44.5% holding in King-Coal Corporation and 30% of Maple Coal company, Cambrian Mining will receive 18,117,318 Coal International shares, valued at £18.1 million ($US31 million).

Cambrian will also buy an additional five million Coal International shares at £1.00 per share to provide additional working capital.

Once the deal is sealed, Cambrian will emerge with 36.1% of the enlarged share capital of Coal International.

King-Coal assets, valued at £14.4 million ($US25 million), include coal leases in West Virginia, consents to mine the Bar Eagle and Birch 2A deposits, and a slurry impoundment recovery operation.

Maple Coal’s £4.47 million assets include various permits covering coal interests in West Virginia.

“Coal international was formed to take advantage of the opportunity to create a substantial group by acquiring near-production coal mining assets,” chief executive W Durand Eppler said.

“The acquisitions of King-Coal and Maple Coal represent a significant step in that direction,” Eppler said.

“Production is due to begin before the year end and we are very positive about the prospects for these properties.

“We are pleased to have Cambrian Mining as a significant shareholder and look forward to a close working relationship.”

Coal International was admitted to trading on the Alternative Investment Market (AIM) in April. After it completes the Cambrian deal, it expects to be re-admitted to AIM on 13 December.