Suitors are currently taking a close look at Carabella Resources Ltd.'s (CLR.AU) key Grosvenor West coking coal project in Queensland, the Australian exploration company said Monday.

The company said a data room has been set up to allow a select group of unnamed parties to access information under confidentiality agreements after it received several unsolicited expressions of interest in the project since listing in late 2010.

"Due diligence investigations have commenced only recently. At this stage, it isn't certain what form of transaction will be proposed to the company and it is also uncertain whether an acceptable transaction proposal will be provided by the interested parties," Carabella said in a statement to the Australian securities exchange.

The news helped buoy Carabella's shares, which at 0245 GMT were trading 13% higher at A$1.90, giving it a market capitalization of A$165 million.

Carabella holds interests in a portfolio of 10 coal exploration permits in Queensland and according to its website is focused on developing Grosvenor West, which has a coking coal resource of about 92 million metric tons. The asset is located near coal projects belonging to BHP Billiton Ltd. (BHP), Anglo American PLC (AAL.LN) and Peabody Energy Corp. (BTU).

The company last week named industry veteran Anthony Quin as its managing director, succeeding Mitch Jakeman who stepped down in late August after what the company said were irreconcilable differences with the board. Quin spent 14 years with BHP, including two years as chief development officer of its coking coal business.

Melbourne-based BHP has been linked to a number of possible acquisitions in recent days, with newspaper reports suggesting a potential US$6 billion offer for Alabama-based Walter Energy Inc. (WLT) and separately a GBP2 billion bid for Brazilian iron ore company Ferrous Resources. BHP has declined to comment on the reports.

-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094; robb.stewart@dowjones.com

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