The Australian junior announced it had signed the joint venture with China Coal’s subsidiary China Coal Import & Export Company this morning.
Funds will be used for exploring and evaluating the project’s potential and also open up the opportunity to participate in MetroCoal’s other tenements.
Today’s agreement requires a minimum spend of $4 million within the first two years.
MetroCoal chairman David Barwick said the agreement fulfilled the company’s aim of developing projects with substantial partners and brought it towards its exploration target of 2.5-3.5 billion tonnes.
“China Coal is a substantial company producing in excess of 100 million tonnes of coal a year,” MetroCoal chief executive Mike O’Brien said.
“With access to this strong mining base, CCIEC will bring valuable technical skill and expertise into the joint venture, particularly in underground coal mining.”
CCIEC managing director Dr Hu said Columboola gave China Coal a significant opportunity to confirm a major resource and future thermal coal supply base as well as a partner to build its exposure to the Surat Basin.
The deal has been approved by the Foreign Investment Review Board but is subject to approvals by Chinese government agencies. Approvals are expected within three months.
MetroCoal has continued exploration at its other Surat holdings, kicking off drilling with two rigs at its underground projects now that ground conditions have improved from the recent spate of harsh wet weather.
The company has a 30-hole drilling program targeting the Bundi, Norwood, Miles North, Miles West and Miles East project areas.
These areas are considered highly prospective for underground coal mining and are also close to planned rail infrastructure.
Overcoming the recent delays, MetroCoal chief operating officer Theo Psaros said the drilling was now firmly underway.
The explorer announced an initial inferred resource of 58 million tonnes at the Bundi project in late January, based on data from Queensland Mines and Energy, data swaps with other companies and its own drilling program.
MetroCoal’s shares remained steady this morning at 21c.
