Shares in Pilbara explorer Fox Resources were up over 14 per cent today as it announced it was to acquire of a number of coal tenements in Queensland.
The price shot up 14.5 per cent, .08 cents, to 6.3 cents in early trade today as Fox said it had agreed an option to acquire 16 coal exploration permits and one EPC under application, in the Styx, Bowen, Maryborough and Galilee basins.
These tenements were held by Currawong Coal, a joint venture of XLX Exploration, Cliffs Natural Resources and Conarco Minerals.
The company said acquisition of the Queensland tenements following exercise of the option would deliver significant diversification to its minerals exploration program, which to date has been primarily focused on nickel, copper and iron ore projects in the Pilbara.
The tenements comprise more than 10,000sqkm within the major coal bearing basins of Queensland, all of which are considered to be prospective for either coking or thermal coal.
Fox will now conduct due diligence before determining whether to exercise its option to acquire the tenements by December 12.
The consideration payable by Fox for exercise of the option comprises of $1 million in cash, $725,000 worth of ordinary shares in Fox following exercise of the option, a further $725,000 worth of ordinary shares in Fox if certain levels of JORC compliant thermal or coking coal resources are identified within five years of acquisition and a 0.95625 per cent gross proceeds royalty in respect of Fox's interest in the tenements.
Fox will pay the vendors an option fee of $100,000 within seven business days, regardless of whether it exercises the option.Fox Resources is due shortly to receive an independent geological report on the tenements.