Options over the licences previously held by private Western Australian company Dugal have now been exercised.
In March, RTL entered into an option agreement with the share and option holders of Dugal to acquire 100% of their securities in the private company.
In exchange, RTL has agreed to pay a $US100,000 exclusivity fee and further consideration when RTL exercises its call option.
This consists of a cash payment of $450,000 plus the issue of 250 million ordinary RTL shares and 250 million free attaching RTL options.
Yesterday RTL announced the due diligence period had been successfully concluded and the transactions would be exercised, subject to settlement and associated shareholder approval.
Once the deal goes through, RTL will gain exploration licences 3245L and 3246L.
The 3245L area covers 172 square kilometres and is adjacent to Riversdale’s Zambeze project which holds more than 9 billion tonnes of resources including 2.37Bt in the indicated category.
Geology consultancy Al Maynard & Associates has interpreted that about 14sq.km of Lower Karoo Formations occur in the tenement.
The other tenement, 3246L, is about 80km to the east and covers 208sq.km.
RTL said this tenement was about 45km southeast of the camp for Vale and ArcelorMittal’s $1.3 billion Moatize coal project.
RTL plans to set a 3.25-4Bt exploration target and even put in a mention of “underground coal gasification” for this licence area.
Back in March, RTL said the tenement package offered potential for coking and thermal coal deposits with individual seams ranging from 2m to 32m.
RTL plans to hold a shareholder meeting to approve the transactions with Dugal in mid-October, and lodge the prospectus to the Australian Securities and Investment Commission.
Aside from the transaction, RTL seeks that shareholders approve the new direction to become a coal exploration and development company – a far cry from its biotech days which started unwinding in the first half of 2008.
RTL also said it was reviewing options to hire or alternatively sell its existing and unmodified JCB trucks and specialist underground agitator trucks.
In June 2009, RTL inked a deal to dispose of its rights to the Mine Mixers technology to Every Day Mines Services.
RTL’s shares were up 0.4c or 20% to 2.4c yesterday.
