Stanmore Resources acquires remaining 50% of Eagle Downs

Stanmore Resources (ASX: SMR) has acquired the remaining 50% in the Eagle Downs metallurgical coal project and 100% of the Eagle Downs South tenements in Queensland.

Stanmore acquired the first 50% of Eagle Downs from South32 (ASX: S32) in early February 2024. The remaining 50% was held by Aquila Coal, a subsidiary of China Baowu Steel Group Corporation.

For Eagle Downs, Stanmore will pay $22.81m (US$15m) in cash to Aquila on completion of the transaction and $30.41m (US$20m) payable upon the first 100kt of col being mined from longwall mining methods.

It also consists of a capped royalty of up to $228.1m (US$150m) payable in the future linked to average coal index price thresholds.

For Eagle Downs South, Stanmore will pay $2m in cash upon completion of the transaction and $10m payable upon the first 100kt of coal being mined from longwall mining methods.

Stanmore chief executive and executive director Marcelo Matos commented on the acquisition.

“In acquiring 100% of the Eagle Downs assets Stanmore has full control over the development plan and is able to streamline management and fully leverage its strong technical capabilities, as well as unique infrastructure and logistics portfolio to unlock the value of the asset to its full extent,” he said.

“Stanmore will seek to optimise the development plan and take a capital efficient approach to any future development decision.”

The transaction is expected to be completed during H2 2024, following the satisfaction of certain limited conditions including but not limited to Foreign Investment Review Board approval, Chinese regulatory approval and certain third-party consents.