(MENAFN- ProactiveInvestors - Australia) South East Asia Resources (ASX: SXI) is on the acquisition trail with plans to acquire three coal exploration licences on Tasmania.
The company has inked a term sheet covering an option to acquire Tiger Coal Pty Ltd and Energy Investments Pty Ltd, the holders of the three licences.
The three exploration licences, which cover 700 square kilometres in the Central Midlands of Tasmania, are estimated to host a non-JORC coal Resource of 390 million tonnes of potential shallow open cut bituminous coal.
If South East Asia Resources exercises the option, the company plans to develop a minimum of 1 million tonne per annum mining operation for a specific export market.
Coal seams are around 3.2 metres in thickness, with low sulphur, and an in-situ calorific value of 5,500 kcal. The inherent qualities of this type of coal are preferred by cement producers.
The Central Midland project area is serviced by extensive infrastructure including a highway and rail with direct access to the Bell Bay deepwater port, 150 kilometres away.
Discussions are already underway with potential long term offtakers.
Given the nature of the resource and infrastructure availability, first production is slated to begin within 18 months of securing necessary approvals.
First stage due diligence has been undertaken by South East Asia Resources' subsidiary South East Asia Energy Resources, including discussions both directly and indirectly with Tasrail, Tasports , Mines Department consultants, contractors and local stakeholders.
The project area has previously been the subject of extensive exploration and feasibility works.
Once South East Asia Resources has signed formal legal documentation detailed technical and legal due diligence will begin.
This will include an exploration program to establish a JORC Measured Resource of at least 25 million tonnes â€" all of which is anticipated to be completed within four months.
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