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Allegiance acquires 100% of its Telkwa coal project

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World Coal,

Allegiance Coal Ltd has, through its wholly-owned subsidiary Telkwa Coal Ltd (TCL), entered into an agreement to acquire from the Carbon Development Corporation, a wholly owned subsidiary of Altius Minerals Corporation (Altius), 100% ownership of all the rights to coal licences that make up the Telkwa metallurgical coal project, located in northwest British Columbia, Canada.

Up until this acquisition, Allegiance had earned 20% project ownership, and had the right to earn up to 90% project ownership upon satisfaction of several milestones. The remaining 10% project ownership would be retained by Altius who had a free carry on its project equity in relation to a small mine. In consideration for the issue to Altius of 40 600 000 ordinary shares in Allegiance, and the continued performance of the milestone obligations, Altius has agreed to transfer full ownership of the Project to the company.

The allotment to Altius, which is equivalent to approximately a 10.5% interest in the company on a diluted basis, will occur on completion of the acquisition and will be made under Allegiance’s existing 15% capacity in accordance with ASX Listing Rule 7.1.

Allegiance has been actively engaged with steel mills, commodity trading and investment houses for several months in relation to potential joint venture investment and off-take commitment in the Project at the TCL level. Securing complete ownership of the project clears the pathway to securing a joint venture partner.

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Canada coal news