The heads of agreement will enable MPJ to acquire 100% of Delcarmen Energy for $1 million with consideration for the acquisition to be completed on a 50:50 equity and cash basis.

The agreement is subject to due diligence and obtaining shareholder and regulatory approval for the transaction.

Delcarmen has filed two exploration permits for coal applications north and east of Kingaroy, approximately 170km west of Brisbane.

The tenements are both prospective for thermal and semi-soft coking coal and are also close to existing rail infrastructure.

The company is seeking to engage an independent consultant to develop a conceptual target and initial drill program for the company once an acquisition has been finalised.

MPJ said the coal acquisition was the first step in its plan to build up a cache of coal tenements.

“MPJ believes this initial acquisition will provide a solid platform to develop a prospective coal portfolio due to the EPCA areas’ potential and the existing rail infrastructure dissecting the tenement area,” the company said.

In addition to the transaction, MPJ intends to raise up to $800,000 via a private placement of up to 40 million fully paid ordinary shares in MPJ at 2c per share.

The capital raising is subject to shareholder approval and will provide the company with further working capital.