Aspire Mining (ASX:AKM) continues to develop its alliance with Noble Group with an agreement to acquire a 50% interest in the Ekhgoviin Chuluu Joint Venture (ECJV) that holds a 60% interest in the Nuurstei Coking Coal Project in northern Mongolia.

The project will be acquired from Xanadu Mines (ASX:XAM) at a highly favourable price. Noble holds the remaining 50% interest in ECJV.

It will issue Xanadu 10 million Aspire shares upon the ECJV entering into an agreement to undertake feasibility studies in the Nuurstei Project area. Or, upon the Mineral Resource Authority of Mongolia granting a mining license over all or part of the Nuurstei Project area.

Nuurstei contains a low volatile bitumous coal with moderate to high ash levels and low sulphur.

Analysis

The acquisition of Xanadu Mines' 50% interest in the Ekhgoviin Chuluu Joint Venture provides Aspire Mining with another coal project in Mongolia.

The price appears very reasonable with no upfront cash outlay and staged issuance of shares.

As well it enhances the existing alliance with Noble Group which includes a number of transactions relating to project financing, supply chain logistics, port and rail capacity access.

That alliance partner Noble Group holds the remaining 50% in ECJV, which has a 60% interest in the Nuurstei Coking Coal Project, is also encouraging given that both companies are working together on the Ovoot Project.

Also notable are the potential operational marketing synergies between Nuurstei and Ovoot given that the former located within a relatively short trucking distance to the proposed Northern Rail Line.

Source: Proactive Investors Chinese