Pacific American Coal Ltd (ASX:PAK) has agreed to sell its South Hazell Exploration Project in Canada for C$1 million in cash after receiving an unsolicited offer from North Coal Limited.
The sale of the South Hazell Project enables the company to dedicate resources to develop its Elko Coking Coal Project in Canada.
Pacific American chairman Geoff Hill said: “While the PAK board identifies value in the South Hazell Project, the current offer for the property is an ideal opportunity for PAK to realise this value without additional expenditure.
“The sale enables PAK to focus our attention on the exceptional Elko Project which provides significant leverage to PAK shareholders in the prolific East Kootenay Coal Basin.”
READ: Pacific American prepares for drilling to boost coking coal resources
Elko is a highly attractive project, with 257 million tonnes of JORC 2012 resource already identified.
Pacific American has an exploration program scheduled for the 2018 northern summer window.
Pre‐drilling environmental studies have been successfully completed and the majority of approvals required to commence the planned exploration program have been received.
Pacific American is working closely with the Ministry of Energy, Mines and Petroleum Resources (MEM) towards receiving final approval for its Notice of Works.
Rail cost advantage
Elko is within 20 kilometres of coal rail infrastructure and is at the southern end of the East Kootenay Coal Basin.
This makes it the closest coal project in the basin to coal ports in Vancouver with a circa $2 per tonne rail cost advantage over projects at the northern end of the basin.
A project study report delivered by Palaris Australia in May 2017 identified that the project did not require significant capital expenditure to deliver initial shipments of coal to market.