Queensland Bauxite has signed an agreement with Regius Coal Mining which will see QBL acquire a 35% interest in a Regius Coal subsidiary holding interests in two Mozambique exploration licenses.The licences are considered to be prospective for coking and thermal coal and are located in the Zambezi coal basin in Tete province. Queensland Bauxite (QBL) also has a further option to earn up to 51% of the Regius Coal subsidiary. Upon completion of the transaction, QBL and Regius Coal, an Australian unlisted company, as joint venture partners, intend to progress coal exploration activities over Licenses 4070L and 4169L.
Regius Coal currently holds an 80% interest in License 4070L and the right to acquire up to an 85% interest in License 4169L, as well as interests in other Mozambique exploration licences. The Tete coal fields of Mozambique have proven to be the next frontier for large scale coking and thermal coal projects with multinational companies like Rio Tinto, Vale, Anglo American, Tata and others having already invested billions of dollars in exploration and development. In partnering with Regius Coal to explore Licenses 4070L and 4169L, QBL will have the benefit of Regius Coal’s team that has significant African coal experience, a strong in-country presence and a unique set of financial, geological and project management skills that will be required to drive the required exploration programme.Concurrent with the transaction, QBL has entered into a loan note facility under which it has issued loan notes to raise A$1.8 million to strengthen its balance sheet and provide further working capital to facilitate the transaction and the subsequent further investment that may be necessary to develop the company’s assets in the near term.