Tinkler ready to make another coal fortune

ENTREPRENEUR Nathan Tinkler will help develop Coalworks’ Ferndale project in the Hunter Valley of New South Wales through a joint venture to earn a 50% stake in the project for an investment of $25 million.

Blair Price

Boardwalk Resources, associated with Tinkler, inked a heads of agreement with the NSW coal explorer to earn half of the project by spending up to $25 million on a bankable feasibility study for open cut mining along with a prefeasibility study on underground mining development.

On Friday Coalworks said the JV agreements were being finalised and would be executed this Wednesday.

The HoA also allows Boardwalk to take a 19.9% stake in Coalworks, pending shareholder approval, with a vote expected in January.

Coalworks managing director Andrew Firek was “delighted” to welcome Boardwalk as a JV partner.

“Nathan Tinkler has demonstrated his unique ability to add value to coal projects. We believe that Boardwalk will help us build Ferndale into a very valuable asset for Coalworks,” Firek said.

Tinkler said both parties had worked for months over signing a JV for the Ferndale project.

“This is a project that has considerable size and potential with good export coal quality. I look forward to working with the Coalworks board and management team to

bring the project into production,” Tinkler said.

The exploration target for Ferndale was recently lifted to 350-550 million tonnes, with five of the seven holes in the first-phase drilling program completed.

Coalworks acquired a 90% interest in the Ferndale project in late January.

The junior also recently announced a move to spin off its wholly owned Indonesia-focused subsidiary Orpheus Energy.

Orpheus is expected to list in the first quarter of 2011 and will hold Coalwork’s Ashford limestone project in NSW, plus its Hodgson Vale underground coal project south of Toowoomba in Queensland.

The wealthiest man under 40 in this year’s BRW’s Young Rich List, Tinkler was estimated to hold a $610 million fortune in September.

He increased his standing in the rich list by $244 million from last year.

The former sparkie kicked off his investment career by selling his Custom Mining business, which held the Monto coal deposit, to Macarthur Coal for $247 million back in 2007.

He also cashed out of Macarthur shares for more than $400 million in 2008, selling a 10.4% stake in the metallurgical coal producer to steelmaker ArcelorMittal at $19.96 per share.

Tinkler’s Aston Resources bought its flagship Maules Creek project in the Gunnedah Basin off Rio Tinto subsidiary Coal & Allied for $480 million in November 2009, although the negotiations started in earlier months during more stressful times caused by the global financial crisis.

While Aston shares slumped 4.4% in their debut from an issue price of $5.96 each, they are trading higher than $7.70 today – giving the company a market cap of more than $1.5 billion.

Tinkler remains the major stakeholder of Aston (35%).

Coalworks shares are in a trading halt at 70.5c, while three weeks ago they were below 50c.