- Aussie explorer Mastermyne is looking to dig deeper through a purchase of Wilson Mining Services – a company known for its underground coal exploration techniques
- Through a mixture of cash and shares worth $7.6 million, Mastermyne will purchase 100 per cent of Wilson’s shares in a deal expected to finalise by the end of this month
- $3.8 million of the deal will be paid in upfront cash from existing reserves, with the opportunity to substitute remaining dues with more cash instead of shares in the near future
- Mastermyne stated today it expects the acquisition to bolster annual revenue by an additional $30 million – with a likelihood to almost quadruple over a three year period
Explorer Mastermyne announced today the company is moving to add Wilson Mining Services (WMS) to its operations by purchasing the company.
Mastermyne has signed a conditional agreement to purchase WMS which was founded six years before the buyers, in New South Wales.
Mastermyne is seeking to purchase all of the shares in Wilson through a deal worth $7.6 million. $3.8 million of the deal will be paid upfront in cash from the company’s existing reserves.
Depending on WMS’s performance over the next three years, further portions of the payment may be converted to cash to avoid using shares.
Mastermyne’s particular interest in WMS stems from the opportunity to strengthen underground exploration opportunities.
“WMS is a highly specialised underground business that has a niche service offering predominantly in the longwall ground consolidation area,” Mastermyne CEO Tony Caruso said.
“This business pioneered the introduction of phenolic cavity fill and injection products which has greatly improved the safety and productivity of longwalls in Australia,”
With over 25 years of experience in the Aussie underground coal industry, Mastermyne’s management is excited to use the new toolset of abilities to strengthen its projects.
“WMS and Mastermyne have a long history of working together to provide chemical injection and installation support to the Australian underground coal sector and the acquisition of WMS fits well with our growth strategy of providing niche, value adding underground services to our existing clients,” Tony continued.
Mastermyne’s management estimates the purchase of WMS to generate additional annual revenue of $30 million. As well, the company expects the added revenue to nearly quadruple over a three year period.
“WMS’s highly valued services are a smart bolt-on which complements and enhances the Mastermyne suite of services, all of which are essential for the continuation of underground longwall and mining operations,” he concluded.
The company transaction is expected to be finalised by the end of this month.
Share prices in Mastermyne are only marginally different today from yesterday’s closing period, trading 2.78 per cent lower for $1.05 each.
The company’s market cap is currently valued at $109.7 million.