The licence, which is being managed by Pacific Breeze Trading 725, gives Universal Coal a 15% ownership of the project upon completion of legal and technical due diligence, while also developing the resource to a measured status.

Under the terms of the farm-in agreement, Universal Coal will achieve 15% on measured coal resources and 10% on indicated coal resources.

The Donkin project, which is in close proximity to the Somerville coking coal project in South Africa’s Limpopo Province, has a JORC inferred resource of 42.2 million tonnes.

Based on historical drilling, Universal Coal believes the depth of the coal zone at Donkin will be 20-70 metres.

Universal Coal chairman Tony Harwood said he welcomed the acquisition which was in accordance with the company’s strategy.

“We are delighted to have secured an additional farm-in agreement to achieve a 50 per cent shareholding of the Donkin property,” he said.

“This is in line with Universal’s strategy of consolidating key areas surrounding all our project areas.”

Universal is currently undertaking detailed analysis of samples derived from drill holes at its Berenice-Cygnus coking coal project.

The results of the testing, which will define the coking coal characteristics, are expected to be ready in October this year.

Universal recently announced the Berenice-Cygnus project had a 1.2 billion tonne reserve.