Major Chinese and Indian investment is migrating to the Canning Basin, which is evident in Rey Resources (ASX: REY) announcement today of a A$13.8 million share placement to the ASF Group (ASX: AFA), a vehicle for investment facilitation between China and Australia.
ASF holds an interest in exploration tenements adjoining Rey's Duchess Paradise thermal coal project, which lies less than 20 kilometres from Stratum's Canning Basin Coal Project.
Stratum is quite strategically placed surrounding Rey Resources and the ASF Group, and recent events demonstrate the level of activity happening in the Canning Basin, an emerging coal province.
Martin Holland, managing director of Stratum, told Proactive Investors today the company has been in several discussions with Chinese majors.
"We've had a number of Chinese companies approach us already and we've been in discussions with them.
"Though Stratum's view is that we've got enough cash in the bank at the moment to prove up a resource, and we're actually looking at going down that track to give value to our current shareholders before we look at bringing in some international players into our company."
Stratum is only a couple of weeks away from securing final heritage approval of the project before it can begin its first exploration campaign.
The company anticipates final approval on 9 July ahead of a mid-August start for exploration.
Stratum has also lodged its plan of works with the Western Australian Government and expects approval in the next few weeks.
Canning Basin Coal Assets
Coal interests are held in an 80/20 Joint Venture with State Resources at the Canning Basin Coal Project, which is located about 150 kilometres southwest of Derby, in the Kimberley Region.
Stratum owns three exploration licences in the Canning Basin, the largest onshore sedimentary basin in Western Australia, and an emerging coal province.
The project area is less than 20 kilometres from Rey Resources' Duchess Paradise Project which hosts an Inferred Resource of 535 million tonnes of coal. Rey has fended off two takeover offers for the company, indicating the demand for coal from Asian interests.
The main coal bearing strata within the basin is known as the Lightjack formation, which is contained within the Fitzroy Graben that covers the northern end of the Canning Basin.
The Stratum Metals Joint Venture covers an area of 465 square kilometres within the Fitzroy Graben, and covers known outcrops of the Lightjack formation.
Stratum will be the first company to drill on these tenements since BHP and Rio exited the area due to poor thermal coal prices and the want for higher value coking coal instead.
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