Perth-based Hunnu Coal has beefed up its Mongolian coking coal portfolio, with the $40 million acquisition of a controlling interest in tenements owned by a subsidiary of Rio Tinto.
Hunnu told the ASX today it would acquire Rio Tinto Minerals Development's 70 per cent interest in the Altai Nuurs coal joint venture, located in Mongolia's south western Gobi Altai province.
The coal explorer said it would pay $23 million in cash on signing, with a further $17 million in deferred payments.
The Altai Nuurs project comprises six exploration licenses totalling over 46,000 hectares and four mining licenses totalling 202ha with an exploration target of between 250 million tonnes and 500Mt.
Hunnu said preliminary test work indicate the coking coal parameters at Altai Nuurs compared favourably with similar projects elsewhere.
The purchase is the second major announcement in less than two months for Hunnu, which entered a strategic partnership in March with Thailand-listed Banpu Minerals to develop its Mongolian coal tenements.
It said it holds 413Mt of JORC compliant coal resources across its other projects.
Hunnu was one of Western Australia's top sharemarket performers in 2010, with its stock finishing the year up 570 per cent on its listing price of 20 cents at $1.34.
"The company intends to continue its aggressive exploration and acquisition efforts and with the support and expertise of its strategic partner, Banpu PCL, move from exploration to mine development and then into production, all within this year," Hunnu said in a statement.
At 9:39AM (WST) Hunnu's shares had moved slightly upwards, gaining 1.7 per cent to trade at $1.49.
