PERTH (miningweekly.com) – Coal company Bathurst Resources has announced plans to increase its Canadian footprint through the acquisition of the Tenas coking coal project, in British Columbia, from a subsidiary of Allegiance Coal.
The ASX-listed Allegiance Coal went into voluntary administration earlier this year.
“A strong operational performance and our capital management strategy have positioned Bathurst to exploit this type of acquisition,” said CEO Richard Tacon.
“In the Tenas coking coal project, we have a commodity in high demand globally, and in which we have proven expertise and existing clients. The project is also well-located in a tier one jurisdiction in which we have invested since 2018, and in which we are very comfortable. Finally, the acquisition has been secured at a price and on terms that are clearly opportunistic for our shareholders.”
Under the agreement, Bathurst will make an up-front payment of $2.33-million, and will pay $1-million within 45 days of closing the agreement. A further $4-million will be paid on the company receiving the final permits to develop, construct and operate the Tenas project, and a further $3-million will be paid on the first anniversary of receiving all the final permits.
A capped royalty of $3-million will also be payable at a rate of $2/t on coal sales from the Tenas project, where the sales price is above $200/t.
“Operationally, Bathurst has a lot to bring to the Tenas coking coal project. In New Zealand, we have successfully managed and developed coal projects, drawing on the local community for our workforce and the provision of a range of services, whilst servicing industrial clients domestically and in overseas markets. Bathurst also has significant experience working alongside Indigenous Peoples, which remains a priority for us at all of our projects,” Tacon said.
“We now have an interest in two Canadian steelmaking coal projects, strategically positioning Bathurst to build on its existing and lucrative New Zealand cash-generating metallurgical business. This allows us to target a materially higher total production of 3.8-million tonnes a year by 2029, whilst also providing our clients with a potentially long-run supply option beyond 2035.”