Stanmore Resources has sealed a deal to take Chinese group Aquila’s stake in Eagle Downs and nearby tenements for about $65 million plus royalties.

The Bowen Basin coal producer has now secured 100 per cent ownership of the Eagle Downs and Eagle Downs South projects after its announcement in February that it had entered into agreements for South32’s share of the shovel-ready Eagle Downs metallurgical coal project.

“In acquiring 100 per cent of the Eagle Downs assets Stanmore has full control over the development plan and is able to streamline management and fully leverage its strong technical capabilities, as well as unique infrastructure and logistics portfolio to unlock the value of the asset to its full extent,” chief executive officer and executive director Marcelo Matos said.

“Stanmore will seek to optimise the development plan and take a capital efficient approach to any future development decision.”

Stanmore describes Eagle Downs as being ready for immediate construction, with two underground access drifts partially completed before the site went into care and maintenance in late 2015.

It is looking into the potential to reduce development costs for Eagle Downs by piggybacking on its Poitrel and/or Isaac Plains infrastructure and rail and port portfolio.

Eagle Downs boasts a resource base of 1140Mt of resources and 292Mt reserves. The neighbouring Eagle Downs South project has a resource base of 427Mt.

The consideration payable to Aquila comprises:

• In relation to the Eagle Downs interest – $US15 million (about $22.7 million Australian) payable in cash upon completion; $US20 million (about $30 million Australian) payable upon first 100Kt of coal being mined from longwall mining methods; and a capped royalty of up to $US150 million payable in the future linked to average coal index price thresholds.
• In relation to Eagle Downs South – $2 million payable in cash upon completion, and $10 million payable upon first 100Kt of coal being mined from longwall mining methods at Eagle Downs.

Completion of the transaction is expected in the second half of 2024, subject to conditions including Foreign Investment Review Board approval and Chinese regulatory approval.

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