Guildford Coal managing director Mick Avery said the acquisition would have the potential to expand the scale of Guildford’s coking and thermal coal projects in Mongolia.

“The highly prospective Terra Energy LLC projects have the potential to host large scale thermal and coking coal mineral resources and represent an opportunity for Guildford to become a coal producer within 12 months,” Avery said.

Alag Tevsh LLC holds exploration licence 5262X in Mongolia’s South Gobi coal basin, which adjoins to Guildford’s existing South Gobi project tenements.

Independent geologists have set an estimated 122 million tonne exploration target for the 5262X tenement, increasing the exploration target for Guildford’s flagship South Gobi project to 582Mt.

Middle Gobi has an exploration target of 29-149Mt and is located approximately 200 kilometres north of the Tavan Tolgoi Project.

Five drill rigs are operating in the thermal and coking coal projects, including four in South Gobi and one in Middle Gobi.

Avery said exploration at its projects confirmed its targets and the company was progressing to establish JORC-compliant resources on three of its projects in South and Middle Gobi.