PERTH (miningweekly.com) – Coal junior Attila Resources has entered into lease and option agreements to expand its foothold within the Gurnee property, at its Kodiak coal project, in the US.

ASX-listed Attila had an option to lease the Upper Thompson coal seam within the Gurnee property, from existing mineral rights owner RGGS Land and Minerals.

An initial exploration target of between 11-million and 13-million tonnes had been estimated from this area, with Attila already having drilled eight diamond core holes within the Upper Thompson lease as part of its previously completed diamond drill programme.

In addition to the option to lease, Attila had also entered into a lease agreement to mine the Gholson and Clark coal seams in an area known as Project X, which was also within the Gurnee property.

Project X is some 2.5 km from Attila’s existing coal preparation plant and associated infrastructure, and had an exploration target of between two-million and three-million tonnes.

Attila executive director Evan Cranston said that while the Project X exploration target was modest in size, the acquisition provided the company with key access to what was previously thought to be sterilised coal resources on adjacent properties.

“The acquisition of Project X and the option over the Upper Thompson lease is a significant milestone for Attila as it progresses towards production. In addition to expanding the company’s potential production profile, the acquisitions provide critical access to coal seams in adjacent properties, previously considered sterilised.”

Cranston noted that more importantly, Attila now had access to all of the major hard coking coal seams in the Cahaba basin.

He added that Attila was in discussions with other leaseholders in the area with a view to further expanding its footprint and increasing its share of the 500-million tonnes of coal estimated to remain in the basin.

Under the terms of the Upper Thompson agreement, Attila would pay an upfront fee of $70 000 for a one-year option term. The company would also pay an exercise price of $305 000 on execution of an 18-year lease period, or until the resources were exhausted.

A royalty payment of 8% would also be applicable, with a minimum monthly royalty set at $8 000.

For Project X, Attila would pay an upfront lease of $25 000. The lease would run for a period of 18 years, or until the resource was exhausted, with a royalty rate set at 8%, or a minimum payment of $3 000 a month.