In an announcement yesterday Enterprise said it had signed a heads of agreement with Bandanna Coal, to acquire the legal and beneficial right to all issued shares in Bandanna, for a consideration of $A235 million.

Enterprise said consideration for the proposed transaction would be by the issue of 2.037 billion ordinary shares in Enterprise, approximately 94% of the issued capital of Enterprise prior to any new capital raised.

Bandanna Coal currently holds 11 exploration permits for coal, along with applications for a further five.

Exploration permits in the Bowen Basin include the Dingo West PCI project, currently being explored and developed by Macarthur Coal as an opencut mine, and the Arcadia and Springsure projects, both targeting raw export thermal coal at underground depths.

Bandanna's Galilee Basin project, Alpha, is currently targeting thermal coal deposits at depths suitable for both opencut and underground mining.

Key terms of the proposed transaction contained in the heads of agreement include Enterprise embarking on a $40 million capital raising, and three nominees of Bandanna to be invited to seek shareholder approval for appointment as directors to the board of Enterprise.