Under the terms of the joint venture farm-in agreement, MMI has the right to earn up to 10% equity in the project by spending up to $40 million.

Following completion of bankable feasibility study, MMI will have the option to buy another 10% stake at a predetermined value depending on the level of end-user offtake commitment made at that time.

MMI will also be entitled to exclusively introduce coal from the project to Japanese customers.

NuCoal chairman Gordon Galt said the proposed $40 million MMI spend valued the Doyles Creek project at $360 million.

The results of the prefeasibility study announced for the project in July concluded the project had a robust financial and technical basis with a net present value of $523 million at a 10% discount rate.

The financial analysis, completed as part of the PFS, forecast the project would generate more than $800 million in New South Wales government royalties and in excess of $1 billion in federal taxes.