Historic Blair Athol Coal mine sells for one dollar

Image credit: terracomresources.com

TerraCom Limited announced that its wholly subsidiary Orion Mining has reached an agreement to acquire the Blair Athol Coal Mine in Queensland from the Blair Athol Coal Joint Venture (BACJV).

Image credit: terracomresources.com
Image credit: terracomresources.com

The Blair Athol Coal Mine ceased production in 2012. TerraCom said it plans to commence over 50 hectares of site rehabilitation while bringing the mine back to production, which will create about 100 new local jobs.

TerraCom  believes that the recommencement of mining at Blair Athol Coal Mine will provide it with a positive cash flow, which coupled with its recent debt restructuring and hard coking coal mine in Mongolia, will transform the TerraCom balance sheet with a materially positive impact on net assets.

According to the company, the acquisition includes the mining lease, licences, land, contracts and all mining plant & equipment including a dragline to deliver the forecast production schedule and the progressive rehabilitation. All site infrastructure including offices, workshops and stores associated with the mine are also included in the transaction.

“The acquisition price is AUD$1 and TerraCom will receive AUD$80m from the BACJV (vendor) to meet Blair Athol Coal Mine’s rehabilitation liability as determined by Queensland’s Department of Environment Heritage Protection in November 2015. The Financial Assurance will be provided as cash to be held in a bank account approved and controlled by the Queensland Department of Natural Resources and Mines,” the company told the ASX.

“The security package that backs the Financial Assurance is in place, and will be reviewed and approved by the government. The final execution of a binding sale and purchase agreement requires approvals from the TerraCom Board, and each BACJV participant. The Company plans to submit an application for the transfer of the Mining Lease for the consideration of the Minister for Natural Resources and Mines.”