McCullough Robertson has acted for ASX listed NuCoal Resources Ltd (NuCoal) in the transaction with Mitsui Matsushima International Pty Ltd (MMI) for the development of the Doyles Creek Underground Coal Project (Project) and Training Facility in the New South Wales Hunter Valley.
The Doyles Creek tenement contains a 512Mt JORC – compliant measured, indicated and inferred resource of premium quality semi soft coking and thermal coal. The execution of the joint venture documents is a substantial milestone for the Project.
In particular, McCullough Robertson assisted NuCoal with the structuring and drafting, negotiation and finalisation of the farm-in joint venture agreement, the key terms of which are:
- MMI has the right to earn up to a 10% equity in the Project by spending up to $40 million on the Project
- following completion of a Bankable Feasibility Study, MMI will have an option to purchase an additional interest of up to 10% in the Project at a predetermined valuation which is dependent on the level of end-user offtake commitment made at the time of exercise of the option, and
- MMI will be entitled to exclusively introduce the coal from the Project to customers in Japan.
MMI is a 100% owned subsidiary of major Japanese Corporation Mitsui Matsushima Co. Ltd.
The Project is valued at $360 million and is committed to be a specialised coal centric Training Mine Facility, which will be run in parallel with the mining operations. No other project currently exists in Australia where the actual training facility is situated within an operating coal mine.