Golden Energy unit to buy BHP metallurgical coal assets for $ 1.6 billion

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SINGAPORE (BUSINESS HOURS) – Golden Energy and Resources (Gear) announced on Monday, November 8 that it intends to buy BHP Group’s 80 percent stake in a joint venture with Mitsui & Co for $ 1.2 billion (S $ 1.6 billion ) through its 75.33 percent owned subsidiary of Stanmore Resources.

The joint venture, BMC, owns two coal mines in Queensland, Australia, with combined metallurgical coal production of around 10 million tonnes per year, as well as the undeveloped Wards Well coal project. It is 20% owned by Mitsui & Co.

Based on a revenue sharing mechanism, Stanmore will also pay up to US $ 150 million to BMC if the average sale price is above a certain threshold more than two years after the acquisition is completed, which should take place around the middle of next year.

Gear, in his scholarship file, said he “fully” supports Stanmore’s acquisition of BMC.

The group will also vouch for Stanmore for the purchase price as well as up to $ 600 million in severance fees if the deal fails.

In a Nov. 8 press release, Stanmore said he viewed the proposed acquisition as “transformational.”

It estimates about 11 million tonnes of salable coal in BMC’s assets for the fiscal year ended June of this year.

Due to the proximity of BMC’s assets to those of Stanmore, the company also believes there is the potential to benefit from shared infrastructure, corporate functions and coal blending opportunities.

“This transaction will see the company become one of the world’s leading producers of metallurgical coal and provide Stanmore with a Tier 1 asset portfolio, with a significantly increased reserve and resource base and assets with an expected useful life. of mine over 25 years of production, positioning the company for substantial cash generation and future growth opportunities, ”said Marcelo Matos, CEO of Stanmore.

Gear’s shares were trading up 0.5 cents, or 1.5%, at 34 cents at 10:32 a.m. Monday, after its announcement.


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