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Sumitomo to acquire up to 20% of Bowen's Hillalong coking coal project

Sumitomo Corp. said Oct. 7 that its subsidiary SCAP Exploration Pty Ltd. has agreed to a farm-in terms with Bowen Coking Coal Ltd.'s subsidiary Coking Coal One Pty Ltd. to acquire up to 20% of the Hillalong project in Queensland, Australia.

Under the agreement, Sumitomo will fund A$2.5 million of pre-defined exploration expenditure, being the entire Phase 1 exploration program for both Hillalong North and Hillalong South, within 12 months of entry of the farm-in agreement to earn an initial 10% stake in the project.

Sumitomo has the right to earn an additional 10% interest by providing a further A$5 million funding for to-be agreed exploration and study activities at Hillalong within 24 months of the Phase 2 work program being approved.

Both companies will form an unincorporated joint venture managed initially by Bowen after Sumitomo has earned the interest in the first phase.

Bowen granted Sumitomo an exclusivity period of 60 days in which the parties must agree to formal terms of the farm-in agreement.