The deposit is comprised of 15 coal licences and three licence application areas totalling 9,437 hectares located about 30 kilometres southeast of Chetwynd. Under the terms of the deal, Cardero will initially pay $3.5 million in cash, as well as buy 500,000 common shares and warrants to buy another one million shares at a price of $1.40 per share for 18 months after closing an exchange for a 50 per cent stake in the of Trefi Coal Corporation, a wholly owned subsidiary of Anglo Pacific Group PLC. Once a bankable feasibility study is complete and if Cardero decides to move ahead with the project, the company will pay an additional $5 million and purchase an additional one million shares for the remaining stake in Trefi.
Demand for steelmaking coal is Asia, and particularly China, is driving the recent flurry of activity in the coal fields of northeast British Columbia, including some recent acquisitions. For example, back in April, U.S.-based Walter Energy Inc. completed its $3.2 billion (US) acquisition of Vancouver-based Western Coal Corp.