The deal’s option arm allows it to earn an undivided working interest in 27 Alberta Crown coal lease operations totaling 22,000 hectares in Crowsnest Pass, which it said were well located near infrastructure with capacity to spare.

Altitude also has the right to enter upon and conduct exploration activities in and on any part of the leases, which neighbor Riversdale Resources’ Grassy Mt coal property and are near to Teck Resources’ five operating metallurgical coal mines.

An initial refundable $200,000 cash transfer from Altitude will secure reconnaissance field work during calendar the third quarter. Once received, Elan will provide a 120-day exclusivity period to complete due diligence and complete financing at a minimum of $2 million.

Should financing not come to fruition or final TXS Venture Exchange approval not be received, the initial payment will be returned. If financing is completed but the company determines it is not satisfied with due diligence results, it will receive half of the payment back.

“This is a great opportunity for Altitude to have a direct involvement in a second exciting early stage coking coal project,” president and chief executive officer Andrew Wusaty said.

“Similar to Altitude's Palisades project, Elan's leases are strategically located near existing infrastructure with spare capacity. There has been a significant amount of information accumulated based on the extensive exploration work performed on these properties which includes drilling, trenching, adits and washability technical data.”

Elan has started a National Instrument 43-101 resource report. It should be available for review later this year.

More than 10 coal seams have been identified on the Elan properties with thicknesses between three meters and 10m. Coal quality is low- to medium-vol with variable but generally moderate ash content, good washability and coking coal properties.

Altitude has retained IBK Capital to complete, on a best efforts basis, an equity financing of up to $5 million for its obligations and for general working capital purposes.