Macarthur strengthens Bowen Basin footing

LATE yesterday afternoon Macarthur shareholders approved the company’s purchase of increased interests in six exploration areas in the Bowen Basin for $A48.7 million, paving the way for future developments.
Macarthur strengthens Bowen Basin footing Macarthur strengthens Bowen Basin footing Macarthur strengthens Bowen Basin footing Macarthur strengthens Bowen Basin footing Macarthur strengthens Bowen Basin footing

The Coppabella coal mine in Queensland's Bowen Basin supplies 30% of the global pulverised coal injection market.

Angie Tomlinson

Macarthur bought the exploration tenements from its joint venture partners Bowen Basin Exploration (BBE) and Chinese-owned CITC Australia Coal Exploration.

Macarthur chairman Keith De Lacy said the company was in a strong financial position to support the development of the projects and had committed to developing up to five new mines by 2010.

Yesterday’s purchase has come on the back of a farm-in arrangement signed in 2001 with CITC and BBE, owned by Macarthur chief Ken Talbot.

Under the agreement, Macarthur was required to spend $A7.5 million towards exploration on the tenements over four years, which it met in October 2004.

The acquisitions was satisfied by the issue of about 7.58 million shares at the equivalent price of $A6.37/share.

The acquisition of the new tenements has simplified the ownership structure with most of the tenements now owned 85%-90% by Macarthur and 10%-15% by CITC, with Talbot’s company now only involved with one tenement.

Brokerage Citigroup retained its hold rating and target price of $A5.30 on Macarthur but improved its net present value to $A3.40/share.

Macarthur was trading at $A5.38 this morning.

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