AMCI will earn up to 50% in most of Aquila's Bowen and Surat Basin coal properties by spending $5 million, with the joint venture to be co-managed through a jointly owned management entity.
AMCI has also agreed to take 2.5 million shares in Aquila at $1 a share, representing a substantial premium to yesterday's close of Aquila's shares at 85 cents. AMCI will receive 2.5 million options exerciseable at $1 each before March 31, 2006, but only after Aquila's share price has exceeded $1.50 a share for five consecutive trading days.
Aquila has been actively pursuing opportunities in the coal industry and has ranked Queensland's Bowen Basin as the priority target area, establishing a presence in the north-central part of the Bowen Basin by acquiring 2,300 square kilometres of tenure.
Deposits of economic importance for Aquila include the German Creek formation and Moranbah coal measures which contain the majority of premium grade coking coal deposits mined in Queensland; and the younger Rangal coal measures which are more widely distributed within the basin.
Aquila have adopted a strategy of acquiring undeveloped coal resources that are located close to existing infrastructure which have potential for development in the short to medium term. The company holds ten Exploration Permits for Coal ("EPC's") in Central Queensland, with eight EPCs being in the Bowen Basin and two in the Surat Basin.
