Aquila Resources Limited announced that through its wholly owned subsidiary, IP Coal Pty Ltd, it has signed a binding Share and Asset Sale Agreement to sell its 50% Joint Venture interest in the Isaac Plains Coal Mine (“Isaac Plains”) to Ocean Coal Mining Pty Ltd, a wholly owned subsidiary of Sumitomo Corporation (“Sumitomo”) for AUD 430 million.

The sale follows a number of approaches with respect to Aquila’s interest in Isaac Plains, with the Sumitomo offer ultimately providing the most compelling value proposition. The sale represents an important step in the realization of funds for the construction of key development assets within Aquila’s significant asset portfolio.

The sale to Sumitomo is subject to Vale Australia (IP) Pty Limited, a subsidiary of Vale SA not exercising its 60 day pre emptive right under the Isaac Plains Coal Joint Venture Agreement. The sale is also subject to Sumitomo receiving approval from the Australian Foreign Investment Review Board and relevant indicative approvals under the Queensland Mineral Resources Act.

In addition to the sale proceeds referred to above, the Company will retain its 50% economic interest in an insurance claim in relation to property damage and business interruption during the wet season in FY2011.

Isaac Plains is an operating open-cut coal mine located east of Moranbah in the Bowen Basin in central Queensland in which the Company holds a 50% interest. The mine has a production capacity of 2.8Mtpa and produces a mix of metallurgical and thermal coals the Company’s share of which is exported through the Dalrymple Bay Coal Terminal.

The Company will make a further announcement once all conditions precedent have been satisfied. Aquila has been advised on this transaction by JP Morgan and King & Wood Mallesons. Sumitomo was advised by Macquarie Capital Advisers, Minera Group and Allens Arthur Robinson.

Source - Aquila Resources

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