If the transaction is approved, Advanced Primary Minerals, 60% owned by Erdene, will see the addition of the Donkin coal project in Cape Breton, Nova Scotia, Canada.
Through the deal, Erdene plans to focus on Mongolia minerals exploration and development.
Following Xstrata Coal’s announcement of its intent to sell its 75% stake held in Donkin, Erdene expects the ownership process to be concluded by the end of 2012, which is anticipated to bring the project to production.
Erdene, which has recently concentrated majority of its Mongolian exploration efforts on a new gold discovery, Altan Nar, and Zuun Mod copper-molybdenum project, said that having these assets in a separate public company will result in improved flexibility to source capital for future developments.
Meanwhile, APM will close the sale of its kaolin production assets and associated mining operation by the end of June.
