Bathurst Resources, a coal company, has unveiled plans to expand its presence in Canada through the acquisition of the Tenas coking coal project in British Columbia from a subsidiary of Allegiance Coal. Allegiance Coal, listed on the ASX, entered voluntary administration earlier this year.

Bathurst's CEO, Richard Tacon, emphasized the company's strong operational performance and capital management strategy as the driving forces behind this acquisition. He highlighted that the Tenas coking coal project aligns with Bathurst's expertise and client base in a commodity with high global demand. The project's location in a tier-one jurisdiction, where Bathurst has been invested since 2018, adds to its appeal.

Under the terms of the agreement, Bathurst will make an initial payment of $2.33 million and an additional $1 million within 45 days of closing the agreement. Subsequently, Bathurst will pay $4 million upon receiving the final permits for developing, constructing, and operating the Tenas project, with an additional $3 million paid on the first anniversary of obtaining all final permits. The agreement also includes a capped royalty of $3 million, calculated at a rate of $2 per ton of coal sales from the Tenas project, provided the sales price exceeds $200 per ton.

Tacon stressed that Bathurst brings substantial operational experience to the Tenas coking coal project, citing their successful management and development of coal projects in New Zealand. The company's approach includes working closely with local communities for the workforce and services, serving industrial clients domestically and internationally, and collaborating with Indigenous Peoples, which remains a priority for Bathurst.

This acquisition in Canada complements Bathurst's existing cash-generating metallurgical business in New Zealand. It strategically positions the company for growth, with a target of achieving a total production of 3.8 million tonnes per year by 2029 and the potential to provide long-term supply options beyond 2035 to clients.