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Coalspur receives $15m offer from KCE

25th February 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Dual-listed coal developer Coalspur has become a takeover target, with the Canada-focused company announcing on Wednesday that it had entered into a definitive agreement with coal producer KC Euroholdings.

KCE, which is the parent company of Kameron Collieries – the owner of the Donkin coal mine, in Nova Scotia – would acquire all Coalspur’s shares for 2.3c apiece, valuing the ASX- and TSX-listed company at about A$15-million.

Coalspur told shareholders that the offer price represented a 44% premium to the company’s closing price on February 24, and a 53% premium based on the 60-day volume-weighted average price.

The sales agreement was the culmination of a strategic review launched in June last year, which had been aimed to maximise value for Coalspur shareholders. The company noted that in the past seven months, it had actively canvassed a number of strategic and financial parties with a view to achieving full funding for the proposed Vista coal project, in Alberta, or to achieve a sale, part sale or joint venture agreement.

The process resulted in the junior miner selecting KCE’s proposal, with unanimous support from the Coalspur board.

“After running a comprehensive, global process, the company is pleased to enter into this agreement with KCE. Despite the challenging environment for thermal coal exporters globally, and limited capital market access for single asset developers of thermal coal projects, we have managed to run a competitive process and secured a positive outcome for all stakeholders,” said Coalspur CEO and president Gill Winckler.

Winckler pointed out that the transaction was in the best interest of shareholders, considering the upcoming obligation to repay outstanding debts.

KCE CEO Paul Vining said that the acquisition of the Vista asset would combine well with the company’s Donkin mine and advanced the company’s strategy to service growing international markets through a low cost production platform.

Phase 1 of the Vista development, in the Hinton region of Alberta, would involve the construction and commissioning of a six-million-tonne-a-year thermal coal facility with the capacity to expand to 12-million tonnes a year.

Coalspur was awarded final approval to start construction of the Vista project in October last year.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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