PERTH (miningweekly.com) – The share price of coal developer Atrum Coal remained high on Friday, following Hancock Prospecting’s A$740-million takeover offer for Atrum’s unlisted neighbour, Riversdale Resources earlier this week.
Hancock Prospecting has announced a A$2.20 a share all cash offer for the unlisted Riversdale Resources, with the company prepared to increase its offer price to A$2.50 a share once its shareholding in Riversdale reached more than 50% before the close of the offer.
Hancock already holds a 19.8% share in Riversdale.
While the board of Riversdale has urged shareholders not to take any immediate action, the company’s chairperson Michael O’Keeffe, as well as CFO Anthony Martin and shareholder Steve Mallyon, who collectively hold a 16.5% interest in the company, have said that they would accept the Hancock offer, subject to no superior bid arising.
O’Keeffe has stepped aside as Riversdale chairperson.
Riversdale’s main holding is the Grassy Mountain hard coking coal project, which lies immediately adjacent to Atrum Coal’s flagship Elan hard coking coal project, in Alberta, Canada. Grassy Mountain is expected to produce some 93-million tonnes of coal over its proposed 24-year mine life, with first production flagged for 2021.
The project is estimated to host a measured and indicated resource of some 195-million tonnes.
The shares of ASX-listed Atrum Coal skyrocketed to 25c a share on Thursday, after news of the takeover offer broke, up from 14.5c a share on Tuesday. By Friday, the company’s stock hit a 52-week high at 26c a share and by late afternoon, it traded at 21c each.
Atrum’s Elan project hosts an indicated and inferred resource of 298-million tonnes, with the coal seams at Elan directly correlating with those at Grassy Mountain.