Hillsborough Resources and NEMI have entered into a nonbonding letter of intent, together with Anglo Coal Canada and Itochu Corporation.
Shareholdings in the new entity will be subject to a fair market valuation of each company’s metallurgical coal assets in northeastern British Columbia.
Anglo Coal Canada and Hillsborough will have the right to contribute additional funding to make their shareholdings 60% and 20% respectively, in the event of a shortfall in the valuation of the assets contributed. Anglo Coal Canada will by its shareholdings have management control of the new company.
Hillsborough president and chief executive David Slater said, “The synergies that are inherent in this consolidation are very compelling from a financial, operational and logistical aspect. I believe that we have taken the first step towards creating a truly world-class coal operation in northeast BC.”
The transaction is subject to regulatory and respective company board approvals, with the parties intending to finalise the transaction within the next three months.
