Aquila Resources says it has secured nearly all of the funding required for the development of its West Pilbara iron ore project, after selling its main coal asset to Japan’s Sumitomo Corporation.
Aquila announced today it had sold its 50 per cent stake in the Isaac Plains coal mine in Queensland's Bowen Basin to Japan's Sumitomo Corporation for $430 million.
Aquila also has formed a joint venture with Sumitomo to work on Aquila's Queensland coal exploration assets.
The proceeds from the sale and the joint venture agreement, on top of Aquila's existing cash reserves, should provide two thirds of the funds needed to construct West Pilbara, the company said in a statement.
Once Aquila's 24.5 per cent interest in the Belvedere coal project in Queensland was sold, nearly all of the funding for the iron project would be secured, it said.
Aquila first floated the idea of selling its stake in Belvedere in June 2010, in order to focus on West Pilbara.
Aquila said the sale process for its Washpool coal project in Queensland would continue, but the latest deals would give it flexibility to consider other options for the project.
“Given the previously unanticipated transactions announced today, and in light of the current depressed state of the manganese market, the Board of Aquila has decided to terminate the sale process that has been under way for the Avontuur project area,” the company said in a statement.
Aquila’s stocks have dipped ever so slightly on the ASX today, down 0.6 per cent at 12:40PM WST, trading at $4.97.
