Bowen Coking Coal Ltd. has taken another significant stride in its transition from an explorer to producer signing a term sheet with an agreement with Bowen Basin coking coal producer Fitzroy to share infrastructure and capacity. Close on the heels of announcing its pending acquisition of New Hope Coal's 90% interest in the New Lenton Joint Venture, which owns the Burton Mine and New Lenton Project in the northern Bowen Basin, Bowen has agreed to provide Fitzroy with access to surplus capacity of the haul road, accommodation camp, surface infrastructure and water supply at Burton Mine for its future development projects. In return, Fitzroy will transfer 1Mt of its DBCT port access to Bowen on a permanent basis, provide Bowen with short term access to its port and rail capacity, as well as up to 1Mtpa access to its Carborough Downs CHPP. Fitzroy has also agreed in principle to grant Bowen access to its Broadlea Mine surface infrastructure
(abutting Broadmeadow East) including the office and laydown area, in reciprocation for access to Bowen's Burton infrastructure including the workshop, office, communications and power infrastructure. This will significantly reduce the need for infrastructure related capital expenditure at Broadmeadow East.
Additionally, Fitzroy has agreed in principle to allow Bowen to extend the Broadmeadow East Project into a small part in the northern area of the contiguous exploration permit (EPC667)1, and allow for the mining lease ML70257 to be extended over that area in exchange for an agreed royalty payment. In addition, Fitzroy will be permitted to mine underground, below the Mallawa Haul Road from the adjacent Ironbark no 1 Mine, under a matching/similar royalty structure.
This proposed agreement will be subject to Bowen completing the Burton Mine and Lenton Project acquisition2 from New Hope Corporation, approval from the New Lenton Joint Venture, various other stakeholder consents, as well as the execution of formal transaction documents. In the interest of timing for both parties, provision has been made for early access to some of the infrastructure prior to the completion of the Burton transaction, subject to approval by all relevant stakeholders.