Under the terms of the agreement, China Qinfa Group will make payment through a series of investment tranches with an initial tranche of $1m already transacted while the remaining funds are scheduled to be paid prior to the end of December 2013.

The funds will be utilized to advance exploration and assessment of Paragon metallurgical coal project in the Maryborough basin, Queensland.

Tiaro Coal director and chief geologist Jacob Rebek said Paragon’s project would be among the first new metallurgical coal projects to begin commence production due to favorable location in respect of transport and other infrastructure.

"Queensland is and will continue to be the largest metallurgical coal exporter and Paragon’s project is one of the small number of new metallurgical coal projects in Queensland," Rebek added.