Listed Australian company Bathurst Resources Ltd has entered into a joint venture agreement to buy L&M Coal Holdings' hard-coking coal exploration assets in Buller.
It also has plans to dual list on the New Zealand stock exchange.
Bathurst, with a market capitalisation of about $A7 million ($NZ9 million), signed a joint venture agreement with L&M Coal in early February and wants to complete its 100% share purchase of privately owned L&M Coal by April 30, Bathurst managing director Hamish Bohannan told the Australian stock exchange.
Exploration by L&M Coal, estimated two permitted areas covering more than 10,000ha in Buller contain 50 million tonnes of premium hard-coking coal, used in steel manufacturing, and thermal coal.
Mr Bohannan said the Buller coalfield, whose neighbour is state-owned enterprise Solid Energy, could produce 50 million tonnes of hard-coking coal and 90 million tonnes of thermal coal.
"Studies show it should be developed as an open cut operation that could be in production within 18 to 24 months," Mr Bohannan said.
He said Solid Energy produced about 2 million tonnes of hard-coking coal per year from the area.
Listed New Zealand company Pike River Coal exported its first shipment of 20,000 tonnes of hard-coking coal from its Paparoa Range mine near Reefton, on the West Coast, to India, in February.
Once the Paparoa mine is fully operational, Pike has estimated annual exports of 1 million tonnes for the next 18 years.
Mr Bohannan said due diligence of the Buller coalfield was still under way.
While he gave no details on the purchase price of L&M Coal or possible equity raising, he said Bathurst would stop expenditure on its mining assets in Kentucky and negotiate to return them to the previous owner.
• Privately-owned L&M Coal is a subsidiary of the wider L&M Energy which is focusing on coal seam methane gas and petroleum exploration, largely in the lower South Island.
