Under the terms of the LOI, Royal Coal will acquire coal leases covering a leased area of approximately 1,800 acres within the wider project area of over 46,000 acres.
The company estimates that the wider project area has a potential to contain between 60 million and 138 million recoverable tons.
Royal Coal CEO Robert Heuler said the project will yield the same metallurgical product that other operators are producing in the region.
The company has commenced a drill program in order to produce a resource estimate that is compliant with National Instrument 43-101 standards.
The deal is expected to occur within three to four months.
Royal Coal has provided a non-refundable deposit of $100,000 for the definitive purchase agreement with respect to the new leased area.
