Gold and base metals explorer Gateway Mining has walked away from its $60.5 million acquisition of a coking coal player, after it hit a series of regulatory roadblocks.

Gateway (ASX:GML) was working toward the acquisition of Queensland Coal Investment Holdings, which owns two coking coal projects in the Bowen Basin.

The Bowen Basin, a 60,000 sq km area in central Queensland, hosts Australia’s biggest coal reserves and virtually all of the country’s known mineable prime coking coal, according to the Bowen Basin Underground Geotechnical Society.

Coking coal is vital in steel production — and global crude steel production is at its highest levels since 2012, due largely to China’s focus on infrastructure and housing.

Gateway told investors that it has not been able to obtain clearance from the ASX for the deal “despite considerable effort” on the company’s part and restructuring of certain sections of the sale agreement.

“Due to complications in satisfying the requirements of ASX, the company has been unable to fulfil certain conditions in the sale agreement required for completion, including obtaining ASX and shareholder approval,” Gateway said.

The company was required to re-comply with chapters 1 and 2 of the ASX listing rules because the transaction would mean a change in nature and scale of the company’s activities.

As a result, the deal has now been terminated.

Gateway had been planning to raise $25 million as part of the deal to cover the $10 million cash component and secure $15 million in working capital. The company was also going to divest its gold and base metals tenements.

Gateway had just $29,000 in cash and $206,000 in undrawn loan facilities — provided by managing director Andrew Bray — at the end of the September quarter.

The company is now pursuing other “potential mining related opportunities” and will remain suspended from the ASX until it can hold its annual general meeting. It has been in a trading suspension since mid-February, last trading at 1.9c.

It has been pursuing the Queensland Coal deal since March.

Arrangements for the AGM are underway and Gateway expects to issue a notice of meeting within a fortnight.

Stockhead was unable to reach Gateway for comment.