The Wilton and Fairhill projects are located in the central region of the Bowen Basin surrounded by prominent operational coal mines such as Ensham, Gregory-Crinum, Kestrel and Oaky Creek.
Gateway’s target projects comprise a very large, near-surface coal deposit, which the company will look to exploit over the coming period.
Importantly, the projects have a large 2.6 billion tonne resource spread over 700 metres at less than 100 metres depth.
The multiple coal seams of the Burngrove (six seams) and Fairhill (six seams) formations occur at shallow depths and are the primary targets within the tenements.
Extensive field mapping in the south west of the Wilton tenement has identified coal outcrops of seams from both the Burngrove and Fairhill Formation.
Drilling in the north of the tenement has confirmed continuity of the seams across the entire tenement with consistent thicknesses and low angle dips.
As per the agreement, Gateway will purchase the projects on the following terms:
- Gateway will pay $10 million cash consideration;
- $50.5 million consideration to be satisfied by issue of shares at $0.012; and
- Gateway will conduct a capital raising of minimum $25 million at $0.012 per share.
Both projects represent exposure to a commodity, hard coking coal, which is having very strong medium to long term market dynamics.
Additionally, there is abundant available infrastructure within close proximity to the projects, which the company anticipates utilising as it progresses towards production.
The transaction is intended to create substantial value for shareholders, with the potential for significant upsides as the projects progress towards production in the coming 18 months.