NZ govt approves Buller transaction

BATHURST Resources is poised to fully acquire the Buller coking coal project in New Zealand after several months building up investment interest, resources and reserves.
NZ govt approves Buller transaction NZ govt approves Buller transaction NZ govt approves Buller transaction NZ govt approves Buller transaction NZ govt approves Buller transaction

Bathurst's Buller project

Blair Price

The Overseas Investment Office in the country gave Perth-based Bathurst approval to acquire L&M Coal, the holding company of the Buller project.

The government also gave consent to transfer the Buller permits over to Bathurst.

The Australia-listed coal explorer is pursuing $A110 million of equity raising to fund the purchase of L&M with a shareholder meeting scheduled for November 4.

The explorer plans to place up to 253.4 million shares at 30c each to raise $76 million.

Another $34 million is expected from a 1 for 2 non-renounceable rights issue at 30c per share.

Bathurst first entered into an agreement with L&M over the project in late March.

The explorer has since set total resources of 47.1 million tonnes and reserves of 12.6Mt.

Bathurst plans to start mining the Escarpment deposit in the project in the December quarter of 2011 to produce about 650,000 tonnes of hard coking coal in an area containing old workings.

A ramp-up to 1Mtpa is expected in 2012 when mining starts moving into an area of virgin coal.

In the 2012-13 financial year, Bathurst expects the Deep Creek prospect of the project to start up.

This will double total production to 2Mtpa.

Two years later, the explorer hopes to kick off another open cut operation at the North Buller prospect to ramp up to 4Mtpa of product coal.

This expansion will require another wash plant and additional infrastructure.

Bathurst shares closed up 1c to 49c yesterday afternoon.