Geo Energy Resources' stock surged 3.88% during intraday trading on Wednesday, following the company's announcement of a significant expansion into the coking coal sector.

The company's wholly-owned subsidiary has entered into a binding term sheet to acquire a 50.61% stake in PT Mutiara Hitam Sukses, securing an effective 50.1% interest in PT Harfa Taruna Mandiri. This entity holds a hard coking coal concession covering approximately 3,293 hectares in Central Kalimantan, with indicative proved and probable reserves estimated at 20 to 25 million tonnes.

The proposed acquisition is seen as a strategic move to diversify Geo Energy's predominantly thermal coal portfolio into premium coking coal. Based on recent market prices and estimated cash costs, the project has the potential to generate annual cash profits of approximately USD 220 million to USD 280 million for the group, subject to confirmatory due diligence. The deal is structured with limited upfront capital and is expected to extend the company's mine life by 10 to 15 years, driving investor optimism.