Australian Mining Sector Update: December 2017 - Recently Completed Deals - Mining

Bounty Mining acquires Cook Colliery and other assets

As foreshadowed in our November 2017 edition, Bounty Mining Limited ( Bounty ) has acquired most of the assets of Caledon Coal and Blackwater Coal Pty Ltd (including the Cook Colliery coal mine and the Minyango Coking Coal Project ) for a total of A$31.5 million (with A$6.7 million to be paid on completion and the balance to be deferred and paid over 18 months). In a media release dated 11 November 2017, Bounty confirmed that it had raised A$17 million through an over-subscribed institutional placement to support the acquisition.

Bounty also announced a separate but related A$10 million acquisition from Cook Resource Mining Pty Ltd of assets associated with the Cook Colliery. The acquisition grants Bounty full ownership of the Cook Colliery assets, which include a related mining lease, rail loop, wash plant and coal marketing rights.

Bounty expects to take possession of the assets in late November 2017, and to restart production at the Cook Colliery during the first quarter of 2018.

Whitehaven Coal secures 100% ownership of Tarrawonga Mine

ASX-listed Whitehaven Coal Limited ( Whitehaven ) has announced that it has signed a binding agreement under which Whitehaven will acquire I demitsu Australia Resources ' 30% stake in the Tarrawonga coal mine . On completion, Whitehaven will have 100% ownership of the mine.

Completion of the agreement is subject to a number of conditions being met, including regulatory approvals.

Altona Mining and Copper Mountain to merge

Canadian-based miner Copper Mountain Mining Corporation ( CMMC ) and ASX-listed Altona Mining Limited ( Altona ) have announced the execution of a merger implementation deed under which the parties agree to combine CMMC and Altona through a scheme of arrangement. Under the terms, CMMC will acquire the entire issued capital of Altona for consideration, valued at approximately A$93 million.

Altona owns the undeveloped Cloncurry Copper Project (the Project ). According to a joint media release, the Project has a measured and indicated mineral resource containing over 0.95 Mt of copper and an inferred resource of 0.72 Mt of copper.

Aurelia Metals acquires Peak Mines ¹

ASX-listed Aurelia Metals Limited ( Aurelia ) has announced that that it has entered into a binding agreement with Canadian miner New Gold Inc ( New Gold ) under which it will acquire a 100% interest in Peak Mines , a gold, copper, lead and zinc operation located in Cobar, New South Wales. Aurelia will pay New Gold US$58 million for the acquisition, which is to be funded through the combination of a A$45 million debt facility and a A$70 million capital raising.

Following the announcement of its Peak Mines acquisition, Aurelia separately announced that it has received firm commitments (from both existing shareholders and new investors) to raise the A$70 million required to complete the acquisition and deliver a strong working capital position.

Peabody Energy completes sale of Burton Mine ²

On 27 November 2017, Peabody Energy ( Peabody ) announced that it has completed the sale of its Burton Mine and related infrastructure to the Lenton Joint Venture ( LJV ). LJV (which is 90% owned by ASX-listed New Hope Corporation Limited ( New Hope )) will pay approximately US$11 million for the acquisition, subject to a number of post-closing adjustments.

Following the sale, Peabody will also:

have its asset retirement obligation reduced by approximately US$41 million; and
unlock approximately US$30 million of restricted cash in support of such asset retirement obligation. This, when combined with the company's recently announced revolving credit facility, is expected to free up approximately US$300 million in cash.

It was a busy end of the month for New Hope whose largest investor, ASX- listed Washington H. Soul Pattinson and Company Limited ( WHSP ), also announced the sale of a 9.6% stake in New Hope . Under the sale, 80 million shares were sold to a number new Australian institutional buyers for a total of A$176 million. WHSP will retain a 50.01% interest in New Hope.

Footnotes

¹Corrs partner Sandy Mak led the team which advised New Gold in relation to this transaction.
² Corrs partners Bruce Adkins and Robert Clarke led the team which advised New Gold in relation to this transaction.

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