The deal represents the first major coking coal acquisition for the newly formed Xanadu-Noble alliance which was created in March this year, and it will be undertaken by Ekhgoviin Chuluu (EC), the joint venture company between Xanadu and Noble.
Under the terms of the agreement, EC can earn up to 80% of the Nuurstei coking coal licences.
These include up to $1.5m on drilling to earn the first 60%, followed by a commitment to complete a JORC resource to earn a further 20%, taking EC’s interest to 80% of the project.
A comprehensive reconnaissance drill program has begun at the project with one multipurpose drill rig.
The company expects the first phase will include 3,500 meters of diamond and mud rotary drilling and will take at least two months to complete.
Preliminary coal quality results will be available in early July 2011.
