Under the deal, Kuro Coal will have option to acquire around 70% stake in the Elan project if it completes a feasibility study, among other exploration requirements, including drilling, completion of a scoping study, prefeasibility study.
Altitude and Elan will then have 12.5% and 17.5% stakes, respectively.
Altitude president and CEO Gene Wusaty said: "We are very pleased to have formalized our relationship with Kuro on the development of the Elan coking coal project.
"This will now allow Altitude to focus its exploration efforts on its 100% owned Palisades and related projects in west central Alberta."
Kuro paid $25,000 to Elan after executing a letter of intent. To acquire 20% stake in Elan, Kuro will pay Altitude $150,000 after registration of the limited partnership between Kuro, Elan and Altitude.
After listing on the Australian Securities Exchange, Kuro will issue the vendors 1,500,000 fully paid ordinary shares. In addition, Kuro will initially spend $500,000 towards a 2014 exploration program on the Elan project deposit.
The company will have an option to further increase its ownership to 45% by spending at least $2.5m in exploration, completing a scoping study, and up to 60% spending a further C$4m in exploration and completing a preliminary feasibility study. It can increase to its ownership to 70% by completing a formal feasibility study.
Kuro will have an option of last refusal to buy the remaining 30% stake in the Elan project based on commercially acceptable terms.
Covering around 23,000 hectares, the Elan project comprises 27 Alberta crown coal applications.
