Australian resources company Krucible Metals has agreed to sell its Queensland phosphate tenements to Daton Group (Daton) for $12m in cash.

The divesture relates to all 13 of the company’s phosphate bearing tenements and includes the Korella deposit and mining lease.

Coal based compounded-fertiliser producer Daton’s acquisition will provide the company access to long-term stable supply of high grade DSO phosphate resource with appropriate grade.

Daton currently has operations in Queensland and plans to build a new plant in Brisbane.

Krucible owns over 20 tenements that include exploration applications, exploration permits and a mining lease, hosting a JORC inferred rock phosphate resource at Korella.

This resource is adjacent to existing infrastructure, near to surface and ready to mine.

Daton’s acquisition bid is conditional upon several factors including compliance to regulatory requirements set by the Australian Stock Exchange and approval from Krucible’s shareholders.

The Australian Foreign Investment Review Board (FIRB) will also have to accord its approval to the transaction.