- Stanmore Coal (SMR) has entered a joint venture to purchase the Millennium and Mavis Downs Mine from Peabody Energy Australia
- The purchase price is $1.25 million in cash and a royalty agreement, capped at $1.25 million
- The company will enter the deal with new joint venture partner M Resources affiliated entity, MetRes
- Under the joint venture, the companies plan on restarting the Queensland mine
- On market close, Stanmore is in the grey and trading at 77 cents per share
Stanmore Coal (SMR) has entered a joint venture to purchase the Millennium and Mavis Downs Mine from Peabody Energy Australia for $1.25 million.
The company will enter the deal with new joint venture partner M Resources affiliated entity, MetRes.
The purchase is a cash deal and will also involve a royalty agreement, capped at $1.25 million.
Super royalties of up to $3.5 per tonne for a maximum of five years will also be payable to Peabody in case premium hard coking coal prices are above US$175 (about A$226) per tonne.
Under the joint venture, the companies plan on restarting the mine. Rehabilitation obligations is estimated at $25.7 million.
Millennium Coal Mine is located near Moranbah, Queensland, and is currently under care and maintenance.
The project totals 37 million tonnes of JORC resource, comprising 13 million tonnes of measured, 17 million tonnes indicated and seven million tonnes of inferred material.
“Restarting the Millennium and Mavis Downs Mine represents a low capital and quick to market investment opportunity in a high-quality metallurgical coal asset,” the company told the market.
Notably, the restart of the mine is estimated to created 150 to 200 jobs.
On market close, Stanmore is in the grey and trading at 77 cents per share.