- Bowen Coking Coal (BCB) is looking to move from explorer to producer status after inking a deal to add two prospective coal mines to its portfolio
- Bowen is set to acquire 100 per cent of shares in New Lenton Coal Pty Ltd from fellow ASX-lister, New Hope Corporation
- In doing so, Bowen will have access to The Burton Mine and The New Lenton Project, which it hopes will become near-term producers
- The deal is valued at approximately $97.5 million, subject to certain milestone payments
- Bowen Coking Coal shares were up 16.5 per cent to trade at 9.9 cents at 3:55 pm AEST
Bowen Coking Coal (BCB) is looking to move from explorer to producer status after inking a deal to add two prospective coal mines in Central Queensland to its portfolio.
Under a binding term sheet between the parties, Bowen will acquire all shares in New Lenton Coal Pty Ltd — the entity which holds a 90 per cent interest in the Lenton Joint venture — from fellow ASX-lister New Hope Corporation (NHC) in a deal valued at up to $97.5 million.
Bowen will need to front an initial $20 million payment in either cash or scrip consideration to secure the purchase, which it plans to partially fund via existing cash reserves and a $15.4 million equity raising.
Assets included in the deal are The Burton Mine and The New Lenton Project — both held in the Lenton JV — which Bowen said will be "transformational" in driving the company towards production.
The Burton Mine is in the Northern Bowen Basin in Northern Queensland and was acquired by New Hope Corporation from Peabody in 2017.
Production at the mine ceased in 2016. It has since been under care, maintenance and rehabilitation after 18 years of production.
According to Bowen, the mine still contains three unmined open pit deposits with 64 million tonnes in combined measured indicated and inferred resources, existing infrastructure and a replacement value of around $300 million.
The second asset, The New Lenton Project, is an undeveloped open-cut project with total measured, indicated and inferred resources of 140 million tonnes.
The Lenton JV had previously received approval from the Queensland Government to mine two million tonnes a year of run-of-mine rock, but withdrew efforts to continue mining applications before an environmental impact assessment submission was due in 2018.
Bowen Executive Chairman Nick Jorss said the company planned to get to work at Burton immediately after the acquisition.
"Our immediate focus will be to re-commission the wash plant and associated infrastructure, with the aim of enabling production to re-commence at Burton, Broadmeadow East and also Isaac River within 12 months of completion," he said.
"We look forward to bringing the Burton brand back to the seaborne market as we play our part in supplying this critical mineral into the steel industry as annual steel demand looks set to grow substantially through to 2050."
Bowen Coking Coal shares were up 16.5 per cent to trade at 9.9 cents at 3:55 pm AEST.