The Perth-based junior has entered into a conditional agreement to acquire Black Rock Energy, a privately owned company with coal prospects in the Derwent Valley, northwest of Hobart in Tasmania.

Spitfire has reached conditional agreement with the shareholders of Black Rock to acquire all its issued capital, along with tenement applications for the advanced Langloh Coal Project and the Avoca, Ouse and Sandfly coal prospects.

According to Spitfire, the proposed acquisition would give it the opportunity to expand the existing 10Mt JORC-compliant in situ inferred black coal resource at Langloh and provide a pipeline of exploration opportunities in the region.

During stage one of the agreement, Spitfire will issue 10 million ordinary Spitfire shares to Black Rock shareholders for 100% interest in Black Rock.

The deal is conditional on the granting of the exploration licences for the Langloh and Avoca projects, confirmation of the applications for the Ouse and Sandfly projects and the completion of satisfactory due diligence within 30 days of the share sale agreement.

Stage two will comprise another 10 million Spitfire shares or a $A2 million cash payment to Black Rock shareholders, conditional on the delineation of a 25Mt inferred coal resource.

“We believe the Black Rock acquisition offers a unique opportunity to diversify our commodity base, establish a significantly larger coal resource relatively rapidly and develop a niche coal export business in Tasmania,” Spitfire managing director James Hamilton said.

“This will complement our ongoing exploration programs at the South Woodie Woodie Project in Western Australia, where we have a well-stocked pipeline of attractive exploration targets that will be systematically drilled in 2008 and 2009.”