Legacy came out of a two-day trading halt this morning to announce the proposed acquisition, which marks the company’s first move into the coal sector.

The proposed acquisition of the tenements is the first corporate transaction to be undertaken by Legacy since India’s National Mineral Development Corporation acquired a 50% stake in the company last December.

As part of the binding term sheet, Legacy will pay a total of $6 million to Subiaco Capital, Velarium Holdings and Sara Bella Energy through staged payments.

The payments will be comprised of a refundable deposit, an initial cash payment and a deferred cash payment upon the delineation of an inferred JORC-compliant resource of no less than 100 million tonnes of thermal coal with a calorific value greater than 5000 kilocalories per kilogram.

The coal tenements are located in the coal-bearing regions of the Surat, Mulgildie and Maryborough basins and are in close proximity to major infrastructure.

EPCA 2303 and 2304, located near the towns of Mundubbera and Eidsvold, have an in situ exploration target ranging from 130Mt to 580Mt of thermal coal.

The two tenements are also prospective for semi-soft coking coal.

A railway line from EPCA 2303 and 2304 to the port of Gladstone is about 21km east of the projects.

The remaining four tenements are located in the Maryborough Basin.

Legacy managing director Sharon Heng said acquiring the tenements marked a significant step in its aim of diversifying the company’s portfolio.

“The initial project acquisition is the opening foray into coal by Legacy and is only part of a continuing period of investigation of various opportunities within the Australian mining industry,” she said.

“Looking forward, Legacy’s ability to access significant funding sources means that the company’s future acquisitions are likely to involve larger scale developed or producing assets.”

Legacy chairman NK Nanda said the company was continuing discussions for additional investment in potential coking coal assets in Australia.