Rocklands Richfield showdown nears

QUEENSLAND coal explorer Bowen Energy is confident its $A18 million bid for Rocklands Richfield (RCI) will be successful, with managing director Kevin Nichol telling International Longwall News the rival bid from China Coke and Chemicals was

Staff Reporter

Bowen Energy is interested in two coal leases owned by RCI, MDL324 Hillalong and EPC890 Rocklands, both located in Queensland's Bowen Basin.

"Hillalong has some 112 million tonnes of high grade coking coal, and as an opencut operation can be developed and operating within 12 months," Nichol said.

"The Rocklands project has 153 million tonnes of JORC-compliant coking coal, which is something that we are definitely after ... that's a mine, at current prices of coking coal."

The Aries and Argo seams at the Rocklands project, located near the Blackwater Mine and Cook Colliery, have also been identified as having potential to be mined by longwall mining methods.

Nichol said he first approached Rocklands earlier this year with a friendly merger proposal, but when that was knocked back, Bowen moved to take over the company.

"RCI chose to make this a 'hostile' takeover ... our offer is 10 cents cash plus one Bowen Energy share for every two Rocklands shares. At present values, our bid is worth roughly 42.5 cents," Nichol said.

"RCI shares are currently trading at 19 cents, so it's a pretty straightforward and generous offer."

On September 18, RCI shareholders will vote on a reverse takeover proposal by China Coke and Chemicals.

"If RCI shareholders approve this highly dilutive and complex CCC deal they will lose control of their company to a private group of investors, and we will take our cash and walk away," Nichol said.

Earlier this month, Bowen Energy secured a $A4.5 million agreement with India's third largest steel producer, Bhushan Steel, which gives Bhushan a 90% interest and a right of first refusal to develop any of Bowen's existing and future Australian coal projects.

"Our agreement with Bhushan can be described as 'we find it, they develop it'," Nichol said.

"The beauty for Bowen is that Bhushan is prepared to commit up to $200 million to fund project development, which leaves Bowen free to explore and focus on acquiring RCI."

If the RCI takeover is successful, the new coal projects could be developed by Bowen and Bhushan into an operating coal mine within the next two years.

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