Bounty acquires Cook Colliery

BOUNTY Mining has acquired the assets of Caledon Coal and Blackwater Coal, including the established Cook Colliery and the Minyango Coking Coal project in Queensland.
Bounty acquires Cook Colliery Bounty acquires Cook Colliery Bounty acquires Cook Colliery Bounty acquires Cook Colliery Bounty acquires Cook Colliery

Lou Caruana

Bounty will settle the acquisitions for $31.5 million, with $6.7 million paid on completion and the balance deferred and paid over 18 months. 

The acquisitions include all the assets of Caledon and Blackwater, except for physical property associated with the Minyango project.

Caledon was placed into voluntary administration in May following a water inundation event that fully submerged the longwall at the Cook Colliery. 

The longwall was promptly dewatered but the mine was placed under care and maintenance shortly after and PPB Advisory were appointed as administrators. 

PPB sought proposals for a refinancing or acquisition of the company and its assets, and Bounty was the successful bidder to acquire the assets.

In a separate but related transaction, Bounty also acquired the assets associated with the Cook Colliery that had remained the property of Cook Resource Mining, a subsidiary of Glencore, for $10 million in deferred payments. 

This acquisition places Bounty in full ownership and control of the assets related to Cook Colliery, including the related Mining Lease, rail loop, Glencore washplant and coal marketing agreement.

Bounty is expecting to take possession of the projects in late November. 

It will bring the Cook Colliery back into production as a more flexible and efficient bord and pillar style mining operation instead of the previous longwall, which was buried after the water inflow incident.

Coal production is expected to start in the first quarter of 2018 and Bounty aims to progressively increase production to a total 1.8 million tonnes of product over 12 months.

Historically, the Cook Colliery produced 80% hard coking coal and 20% premium thermal coal.

These transactions will provide Bounty with near term revenue from the Cook Colliery and a mid-term development project in Minyango, for which a mining lease has already been granted. 

Bounty will continue with development of its Wongai project, but this has a longer-term horizon.

Bounty executive chairman Gary Cochrane said Bounty was pleased with the elevated interest in Bounty and the Cook Colliery premium hard coking coal mine off the back of a significantly improved hard coking coal price.

“Our company has negotiated very attractive deal terms that will benefit shareholders both in the short-term and through the life of the mine,” he said.

“We welcome new shareholders as they join us in recommencing mining operations at Cook and, in time, finalising mine plans and commencing operations at the outstanding and advanced Minyango project.”