“We are trying to make the transition from explorer to producer, so on a smaller scale this enables us to start operating and generating some cash flow, rather than hopping straight into a major project first up,” Eastern chief Paul Williams said.

Located on the west coast of New Zealand’s south island, the open cut operation produces high quality low sulfur coal, most of which is sold to the local cement works.

The mine is adjacent to Eastern’s Whareatea West coal exploration tenement area where an initial drilling programme is planned to commence shortly.

Williams said the proposed acquisition would establish Eastern’s coal mining credentials in New Zealand where the company was taking a long term position in exploration and mine development.