Condor has signed a heads of agreement to acquire a 50.3% interest in The Duel hard coking coal project and Tshipise 2 project, in South Africa from Hong Kong-based Signet Coking Coal.

Condor borrow up to €10m from a European financial institution, to fund for the development of two projects, The Marianas iron ore project and the newly right to acquire The Duel project.

Under the terms of the acquisition, which is subject to approvals, Condor will invest $5m of the debt funding to acquire an initial 24.4% interest in Signet within 90 days.

The funds will be utilized to conduct a drill-out at The Duel project.

Condor can buy a stake in the Tshipise 2 project following completion of the drill-out program, and upon delivering a Joint Ore Reserves Committee-compliant resource of at least 30-million tons.

Condor chairman Dr Paul Crosio said the company is securing debt funding by providing Marianas project and the resultant cash flow as security for this debt.

"We have actively sought to diversify this risk and have identified a suitable project in South Africa which is on track to prove a significant hard coking coal resource in 2014," Crosio added.

"As we move from Heads of Agreement we will continue extensive due diligence on the asset but, at this stage, independent review has encouraged us to move forward on this joint venture."