Pilbara lithium and tantalum explorer Yari Minerals (ASX:YAR) has branched out into metallurgical coal with the acquisition of the Rolleston South Coal Project in Queensland’s Bowen Basin.
The junior explorer owns five lithium and tantalum exploration licences covering 1,000km2 in the Pilbara region of Western Australia and has now completed the acquisition of Resource Chain, which owns Rolleston South.
The project, which covers 272km2 of the coal-rich Bowen Basin near major producers Glencore (LSE:GLEN) and Peabody Energy (NYSE:BTU), hosts an inferred resource of 78.9 million tonnes.
The Bowen Basin is home to Australia’s largest endowment of coal reserves, particularly coking or metallurgical coal, with around 50 coal mines in the region.
Previous exploration work at Rolleston South has uncovered six coal seams that are yet to be fully developed, which Yari says provides “significant exploration upside”.
Managing Director Anthony Italiano says a review of the existing resource model is now underway to incorporate additional data from coal seam gas wells and the company is also planning a drill program that will be completed this year.
Drilling is designed to build out and increase the confidence of the existing resource.
Yari notes that historical analysis re-confirmed previous coal quality results indicating that Rolleston is suitable for a “high grade, low ash and high energy coal”.
The washed coal results are between 24.33 and 27.98 megajoules per kilogram, which Yari says supports an export thermal product with evidence that semi-soft metallurgical coal products could also be produced.
To settle the acquisition, Yari issued an initial 72.35 million shares and will issue a further 47.21 million shares once it has received shareholder approval.
This will give Resource Chain an initial 19.9% stake in Yari.
Resource Chain will also receive 86.05 million performance rights valid for five years that will vest and can be converted to shares once Yari has defined an inferred resource of over 100 million tonnes.
Yari will hold a shareholder meeting to approve the issue of the deferred consideration shares and the performance rights in late June.
If the company does not receive shareholder approval, Resource Chain forfeits the right to these securities under the share purchase agreement.
Write to Angela East at Mining.com.au
Images: iStock
