Phoenix Coal, Solid Energy agree to mine purchases

The Bathurst Resources and Talley’s Group joint venture, Phoenix Coal, is to pay $46 million to buy Solid Energy’s Stockton, Rotowaro and Maramarua Mines.

The sale of the former state-owned enterprise’s assets was confirmed on Monday, with ASX-listed Bathurst now setting out details of the transaction as it seeks to raise capital for the transaction from investors.

Phoenix Coal has also agreed to a semi-annual payment based on revenue from coal sold from the Stockton Mine, which will only apply if coal prices rise above $150 per tonne.

This structure will be in place for four years and the maximum that will be paid out over that period is $50 million.

The joint venture’s funds include $14 million from Talley’s Group for a 35 percent stake, $26 million from Bathurst Resources for a 65 per cent stake and a $15 million debt facility from lender Bank of New Zealand.

This will meet the $46 million purchase price and ensure $9m for working capital and bonds.

The sale is conditional on gaining approval from the Overseas Investment Office.

Buller District Mayor Garry Howard says the sale is a good sign for the community.

“It gives stability to the whole arrangement that Phoenix are putting in place,” he says.

“There has been a high level of anxiety in the community previously this gives a good picture of whats in front.”

Source – Newshub