Gloucester stakes out coal acquisitions
New South Wales mining company Gloucester Coal Ltd has entered an agreement with its largest shareholder, Noble, to acquire Noble’s wholly-owned coal mining company, Donaldson Coal Holdings Ltd.
Donaldson, which will be bought for $360 million in scrip and debt of $225 million, owns an open cut and two underground mines producing thermal coal and semi-soft coking coal, located around 25 km west of Newcastle. It also has an 11.6% shareholding in NCIG Holdings Pty Ltd, a new coal export terminal at the Port of Newcastle.
Gloucester has also agreed to purchase Ellemby Holdings Pty Ltd, and its coal operations, Monash, which is a semi-soft coking and thermal coal development in the Hunter Valley.
Monash owns two exploration licences in the Hunter valley covering 22.19 square kilometers, which contain around 287 megatonnes of export grade coking and thermal coal. Project commissioning and first coal production is scheduled for 2017, with full production of up to 9 megatonnes per annum anticipated by 2022. Gloucester says the resource has the potential for more than twenty years of production, mostly of coking coal.
The Monash acquisition will be made for a base price of $30 million and provision of additional shares worth up to $120 million to Ellemby shareholders subject to the achievement of milestones.
The two acquisitions are subject to shareholder approval and are interdependent on each other. Shareholders will vote on the acquisitions on July 8.