Bathurst Resources Limited (BTU) announced two acquisitions, one in the US and the other in New Zealand.
Bathurst Resources Limited has signed an agreement to acquire BD Acquisition LLC which owns the Black Diamond Coal Mine and its exploration interests in the Appalachian Basin Coal Field in Kentucky, USA. This acquisition is a major accomplishment for Bathurst as it represents a first class operating coal operation, in a strategically strong geographic location with new and modern infrastructure. The operation boasts substantial resources/reserves and excellent exploration potential. Bathurst has undertaken detailed discussions with various coal parties on both sale of coal product and on use of the spare capacity at the coal preparation facilities on a cost-plus basis and has secured offers of more than US$60 per ton for 12500 BTU coal and US$70 per ton for stoker coal.
Bathurst has signed an agreement to acquire the stock and assets of BD Acquisition LLC, subject to final due diligence. The full terms of the Agreement are confidential, however the final consideration is expected to be between US$40 and US$60million. Bathurst has contracted Hyde Park Capital Group and Charlotte Capital Partners Inc to raise the monies through mezzanine finance at a project level. The consideration comprises an initial US$3M payment which will be non refundable to Bathurst should Bathurst not complete the transaction, US$42M to be paid at completion, and a deferred payment of US$10M linked to future coal prices.
In a second unrelated deal Bathurst Resources signed an agreement with L&M Coal Holdings to joint venture and ultimately acquire an outstanding hard coking coal asset in the Buller coal field in NZ through the acquisition of 100% of L&M Coal Limited. The acquisition of this advanced exploration asset would complement the recently announced acquisition of the Black Diamond Coal Mine putting Bathurst in an exceptional position in two different regions with two quality operations.
The Buller Coalfield on the West Coast of the South Island of New Zealand is one of the country’s most significant fields and is particularly well known for its production of very high quality, low ash, coking coals that command premium prices on world markets. The 125 year history of mining in the field continues with the current production of a range of coking and thermal coal, much of which is currently exported. Coal mining is a significant part of the NZ economy and facilities for export from the West Coast coalfields are extensive. Railway lines service the entire West Coast coal mining industry and connect to both river and deep water ports.
Bathurst and L&M Coal Holdings have signed a Letter of Intent whereby Bathurst will work in a joint venture with L&M Coal to develop the Buller Project as well as providing Bathurst the sole and exclusive right to execute a sale and purchase agreement to acquire all of the shares in L&M Coal, the agreement of which is to be completed by the 30th April 2010. Following the acquisition of the project, Bathurst would pursue a joint listing on the New Zealand stock exchange. The Letter of Intent does not impose any financial or other commitment at this stage on Bathurst.