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Rio Tinto unit cancels right to buy back 51% of Bowen's Hillalong coal project

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Rio Tinto unit cancels right to buy back 51% of Bowen's Hillalong coal project

Bowen Coking Coal Ltd. said Sept. 4 that it has agreed with Rio Tinto Exploration Pty. Ltd. to amend the original purchase agreement by terminating the right of the Rio Tinto unit to buy back 51% of the Hillalong coking coal project, which is composed of EPC 2141, 1860, and 1824, in Queensland, Australia.

The project will now be in full control of Bowen, while the royalty rate of Rio Tinto Exploration has been increased to 1.50% from 1.25%, and the deferred payment right has been amended to include the requirement for Bowen to pay 25% of its any received consideration upon disposal or transfer of tenement EPC 1860, capped at A$1 million.

Any payment to Rio Tinto Exploration made under the amended agreement will reduce the deferred payment right by the same amount, and the grant of a mining lease over EPC 1860, following its disposal or transfer, will no longer trigger the deferred payment.

Pursuant to the amendment, Bowen is obliged to pay A$100,000 in cash or A$50,000 each in shares and in cash, to Rio Tinto Exploration.

The amendment shares will be issued at a 5% discount to the 15-day trading VWAP prior to the date of the amending agreement.

In February 2018, Bowen agreed to buy Cape Coal Pty Ltd.'s 100% acquisition right over the Hillalong East coking coal project.