Aus Asia Minerals (ASX:AQJ), formerly Coal Fe Resources, has...

Aus Asia Minerals (ASX:AQJ), formerly Coal Fe Resources, has executed a non-binding Heads of Agreement to acquire the mining rights of CV Cantung Karya Mitra Mandiri (CV CKMM), giving it immediate coal production.

CV CKMM is located in Tanah Bambu Regency, South Kalimantan, and is currently exporting mid-calorific coal to China.

Under the agreement, the vendors of CV CKMM will receive 100 million shares in Aus Asia at a deemed price of $0.02 per share.

The vendors will receive a further $2 million worth of shares upon the successful export of 1 million tonnes of coal based on a 14 day volume-weighted average price at the date of issue.

Aus Asia will seek to increase production from current levels should the acquisition be completed.

Earlier this month, the company said it was considering a capital raising of up to A$5 million to fund existing and new projects.

It also added that all legal formalities were in place for its Solok Iron Ore Project in West Sumatra, adding to the necessary production, mining, export, smelter and foreign based company permits that are already in place.

Furthermore, Indonesia’s largest steel maker Krakatou Steel have indicated that they will pay 900,000 rupiah (A$89) per metric tonne of iron ore.

Sample work and further testing is underway with delivery of the first 7,500Mt barge to Krakatou expected in January/ February 2015.