Caledon in takeover talks

AUSTRALIAN coal company Caledon Resources could be the next junior to fall to a larger predator with the Queensland producer currently in talks with “a number of parties”.
Caledon in takeover talks Caledon in takeover talks Caledon in takeover talks Caledon in takeover talks Caledon in takeover talks

Caledon's Cook operation.

Angie Tomlinson

Caledon said overnight it was in discussion over a “variety of potential transactions, some of which may or may not lead to an offer for Caledon’s entire issued and to be issued share capital”

The company added talks were at an early stage and advised shareholders to take no action at this time.

Caledon, listed on London’s Alternative Investment Market and the Australian Securities Exchange, produces coking coal from the Cook mine in Queensland’s Bowen Basin.

The company also owns the nearby Minyango deposit where it has undertaken drilling in preparation for a feasibility study.

Smaller producers are among the most vulnerable to the global financial crisis as falling commodity prices play havoc with margins.

Last month Caledon slashed its coking coal production targets for 2009 by more than half and closed its London offices, blaming a significant deterioration in the market outlook for coking coal.

Last year the mine produced about 460,000 tonnes, below its target of 500,000t, after running into production constraints.

Today’s announcement has pushed Caledon’s share price up 33% to 36c by mid-morning on the ASX.

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