Australia-based exploration company Queensland Bauxite (QBL) is set to acquire stake in two Mozambique coal exploration licenses in the Zambezi basin, close to majors like Rio Tinto, Vale and ENRC.

The company said it has signed a binding term sheet with Regius Coal Mining to buy an initial 35% stake in a latter’s subsidiary, Regius Coal SPV, which owns interests in two Mozambique exploration licenses in Tete province, for $750,000.

After 18 months of the completion of the initial subscription, QBL will have the right to subscribe for a further 16% of the issued share capital in the Regius Coal SPV (up to 51% in Regius Coal SPV) for an aggregate amount of $1.2m in one or more tranches, with the percentage interest which QBL acquires in Regius SPV being adjusted proportionately.

Following the completion of the transaction, QBL and Regius Coal, as joint venture partners, plan to progress coal exploration activities over Licenses 4070L and 4169L.

The latest deal is subject to Regius Coal completing the restructure of its holdings in the Regius Coal SPV Portfolio, so that the interests in the licenses, the subject of that portfolio, are legally and beneficially owned by the Regius Coal SPV.